Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 46,000 Rets per year. Costs associated with this level of production and sales are given below:

	Unit			Total
Direct materials	$	25		$	1,150,000
Direct labor		6			276,000
Variable manufacturing overhead		3			138,000
Fixed manufacturing overhead		7			322,000
Variable selling expense		4			184,000
Fixed selling expense		6			276,000
Total cost	$	51		$	2,346,000

The Rets normally sell for $56 each. Fixed manufacturing overhead is constant at $322,000 per year within the range of 40,000 through 46,000 Rets per year.