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please helpp Polaski Comparty monutactures and seles a single prochuct cabed a Ret. Operoting at capscity, the company can produce and sell 34,000 Rets per
please helpp
Polaski Comparty monutactures and seles a single prochuct cabed a Ret. Operoting at capscity, the company can produce and sell 34,000 Rets per year. Costs associated with. this level of production and soles are given below: The Rets normally sell for $51 each. Fixed manufacturing overhead is $170,000 per year: within the range of 26,000 through 34,000 Rets peryear. Required: 1. Assume that due to a recession. Polaski Company expects to sell only 26,000 Rets through regular channeis next year. A large retail chain has offered to purchase 8,000 Rets if Polaski is wiling to accept a 16% discount off the regular price. There would be no sales commissions on this order, thus, variable selling expenses would be slashed by 75\%. However. Polaski Company would have to purchase a special machine to engrave the retail chain's name on the 8,000 units. This machine would cost $16.000. Polask Company has no assurance that the retail chair will purchase additional units in the future. What is the financial advantage (disadvantage) of accepting the special order? (Round your intermediate calculations to 2 decimal places.) 2. Refer to the original data. Assume again that Polaski Comparry expects to sell only 26,000 Rets through regular channels next year. The US. Army would lke to make a one-time only purchase of 8,000 Rets. The Army would reimburse Polaski for all of the variable and fixed production costs assigned to the units by the company's absorption costing system, plus it would pay an additional fee of $1.80 per unit. 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 U.S. Army's special order? 3. Assume the same situation as described in (2) above, except that the company expects to sell 34,000 Rets through regular channels next year. Thus, accepting the US Army's order would require giving up regular sales of 8,000 Rets. Given this new. information, what is the financial advantage (cisadvantage) of accepting the US. Army/s special order Step by Step Solution
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