omework Problems 22 pts) Saved Polaskl Company manufactures and sells a single product called a Ret Operating at capacity, the company can produce and sell 32,000 Rets per year Costs associated with this level of production and sales are given below Direet materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost 25 * 800,000 320, 000 96,000 288,000 64, 000 192,000 $ 55 $1,760,000 10 The Rets normally sell for $60 each. Fixed manufacturing overhead Is $288,000 per year within the range of 24,000 through 32.000 Rets per year ak Required: 1. Assume that due to a recession, Polaski Company expects to sell only 24,000 Rets through regular channels next year. A large retail chain has offered to purchase 8,000 Rets if Polaskl ls willing to accept a 15% discount on the egalar prie There would be no sales commissions on this order, thus, variable selling expenses would be slashed by 75% However o askE Company woudnio o purchase a special machine to engrave the retall chain's name on the 8,000 unlts. This machine would cost $16,000. Polaski Company : rint has no assurance that the retall chaln will purchase additional unlts in the future. What is the tinancial advantage (disadvantage) of erencesaccepting the special order? (Round your intermediete calculations to 2 decimal places.) 2 Refer to the oniginal data. Assume again that Polaskli Company expects to sell only 24,000 Rets through regular channels next year The U.S. Army would like to make a one-time-only purchase of 8,000 Rets. The Army would pay a fixed fee of $1.20 per Ret, and it would relmburse Polaski Company for all costs of production (variable and fixed) associated with the units. Because the army would pick up the Rets with its own trucks, there would be no variable selling expenses associated with this order What is the financial advantage (disadvantage) of accepting the US. Army's special order? 3. Assume the same situation as described in (2) above, except that the company expects to sell 32.000 Rets through regular channels next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 8,000 Rets. Given this new information, w is the financial advantage (disadvantage) of accepting the U.S. Army's special order? 2. 3. t 3 which manufactures and sells a highly successful line of summer lotilons and insect repellents, has decided to diversity in order to stabilize sales throughout the year. A natural area for the company to and creams to prevent dry and chapped skin consider is the production of winter lotions After considerable research, a winter products line has been developed. However nts Silven's president has decided to introduce roducts for this coming winter.If the product is a success, further expansion in furture years wil be inmated n future years will be Initlated ct selected (called Chap-OM) is a lip balm that will be sold in a lipstick-type tube. The product will be sold to wholesalers in boxes of 24 tubes for $11 per box. Because of excess capacry, no addtional fixed manufacturing overhead costs will be incurred to produce the product. However, a $80,000 charge for fixed manufacturing overhead will be absorbed by the product under the company's absorption costing system. cBook Using the estimated sales and production of 100,000 boxes of Chap-oft the Accounting Department has developed the following ANTOM manufacturing cost per box: Ask Direct material Direct labor Manufaeturing overhead .90 Total cost 3.00 Print $9.50 References The costs above relate to making both the lip balm and the tube that contains it. As an alternative to making the t Silven has approached a supplier to discuss the possiblity of buying the tubes. The purchase pricelof the suppliers em bes for Chap Of would be $1.70 per box of 24 tubes. If Slven Industries stops making the tubes and buys them from the outsice supplier, its direct iabor and variable manufacturing overhead costs per box of Chao-or would be reduced by 10% and its direct materialscots reduced by 25%. Required: 1. If Slven buys its tubes from the outside supplier, how much of lts own Chap-Off manufacturing costs per box will t be able to avoidt Hint: You need to separate the manufacturing overhead of $1.90 per box that is shown above into its variable and fised derive the correct answer) 2 What is the financial advantage (disadvantage) per box of Chap-om if Slven buys its tubes from th 3. What is the financial advantage (disadvantage) in total (not per box) If Slven buys 100.000 boxes or tubes from the 4. Should Sliven Industries make or buy the tubes? 5. What Is the maximum prnce that Silven should be willing to pay the outside supplier for a box of 24 tubes? 6. Instead of sales of 100,000 boxes of tubes, revised estimates show a sales volume of 125,000 boxes of tubes Ait it Sliven buys its tubes from the outside suppler? boses of tubes need to rent extra equipment at a cost of $45,000 per year to make the additional 25.000 that the outside supplier will not accept an order for less than 125,000 boxes of tubes, what is the tinancial advantage the outside supplier? Given this new informaion (disadvantage) In total (not per box) If Slven buys 125,000 boxes of tubes from t should Silven Industries make or buy the tubes 7. Refer to the dato in (6) above. Assume that the outside s box. How man i S70 per r will accept an order of any size ror the tubesat api ce d Silven make? How many boxes of tubes should it buy from the outside su Complete this question by entering your answers in the tabs below