Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please solve it correctly The Rets normally sell for $74 each. Fixed manufacturing overhead is constant at $630,000 per year within the range of 25,000

image text in transcribed

please solve it correctly

The Rets normally sell for $74 each. Fixed manufacturing overhead is constant at $630,000 per year within the range of 25,000 through 42,000 Rets per year. Required: 1. Assume that, due to a recession, Polaski Company expects to sell only 25,000 Rets through regular channels next year. A large retail chain has offered to purchase 17,000 Rets if Polaski is willing to accept a price lower than the regular $74. 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 17,000 units. This machine would cost $34,000. Polaski Company has no assurance that the retail chain will purchase additional units any time in the future. Determine the maximum discount that Polaski can offer to this large retail chain in order for it to be no worse off compared to its current profit. (Do not round intermediate calculations. Round your percentage answer to nearest whole number.) x Answer is complete but not entirely correct. Maximum discount 257,720 2. Refer to the original data. Assume again that Polaski Company expects to sell only 25,000 Rets through regular channels next year. The Canadian Forces would like to make a one-time-only purchase of 17,000 Rets. The Forces would pay a fixed fee of $2.60 per Ret, and in addition would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Since the Forces would pick up the Rets with its own trucks, there would be no variable selling expenses of any type associated with this order. If Polaski Company accepts this order, by how much will profits be increased or decreased for the year? (Do not round intermediate calculations.) Answer is complete and correct. Net increase in profits $ 299,200 3. Assume again that Polaski Company expects to sell only 42,000 Rets through regular channels next year. The Canadian Forces would like to make a one-time-only purchase of 17,000 Rets. The Forces would pay a fixed fee of $2.60 per Ret, and in addition would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Thus, accepting the Canadian Forces' order would require giving up regular sales of 17,000 Rets. Since the Forces would pick up the Rets with its own trucks, there would be no variable selling expenses of any type associated with this order. Compute the minimum fixed fee per unit that Polaski must receive from the Canadian Forces (in addition to the reimbursement of production costs) in order to accept this order. (Do not round intermediate calculations.) * Answer is complete but not entirely correct. Minimum fixed fee per unit in addition to the reimbursement of production cost $ 142,800 x The Rets normally sell for $74 each. Fixed manufacturing overhead is constant at $630,000 per year within the range of 25,000 through 42,000 Rets per year. Required: 1. Assume that, due to a recession, Polaski Company expects to sell only 25,000 Rets through regular channels next year. A large retail chain has offered to purchase 17,000 Rets if Polaski is willing to accept a price lower than the regular $74. 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 17,000 units. This machine would cost $34,000. Polaski Company has no assurance that the retail chain will purchase additional units any time in the future. Determine the maximum discount that Polaski can offer to this large retail chain in order for it to be no worse off compared to its current profit. (Do not round intermediate calculations. Round your percentage answer to nearest whole number.) x Answer is complete but not entirely correct. Maximum discount 257,720 2. Refer to the original data. Assume again that Polaski Company expects to sell only 25,000 Rets through regular channels next year. The Canadian Forces would like to make a one-time-only purchase of 17,000 Rets. The Forces would pay a fixed fee of $2.60 per Ret, and in addition would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Since the Forces would pick up the Rets with its own trucks, there would be no variable selling expenses of any type associated with this order. If Polaski Company accepts this order, by how much will profits be increased or decreased for the year? (Do not round intermediate calculations.) Answer is complete and correct. Net increase in profits $ 299,200 3. Assume again that Polaski Company expects to sell only 42,000 Rets through regular channels next year. The Canadian Forces would like to make a one-time-only purchase of 17,000 Rets. The Forces would pay a fixed fee of $2.60 per Ret, and in addition would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Thus, accepting the Canadian Forces' order would require giving up regular sales of 17,000 Rets. Since the Forces would pick up the Rets with its own trucks, there would be no variable selling expenses of any type associated with this order. Compute the minimum fixed fee per unit that Polaski must receive from the Canadian Forces (in addition to the reimbursement of production costs) in order to accept this order. (Do not round intermediate calculations.) * Answer is complete but not entirely correct. Minimum fixed fee per unit in addition to the reimbursement of production cost $ 142,800 x

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Maintenance Audits Handbook A Performance Measurement Framework

Authors: Diego Galar Pascual, Uday Kumar

1st Edition

1466583916, 978-1466583917

More Books

Students also viewed these Accounting questions