Polaski Company manufactures and sells a single product called a Ret Operating at capacity, the company can produce and sell 34.000 Rets per year. Costs associated with this level of production and sales are given below: Unit $ 15 10 3 9 Direct materials Direct labor Variable manufacturing overhead Tixed manufacturing overhead Variable selling expense Pixed selling expense Total cost Total $ 510,000 340,000 102,000 306,000 136,000 204,000 $ 1,598,000 $ 47 The Rets normally sell for $52 each. Fixed manufacturing overhead is $306,000 per year within the range of 26,000 through 34,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 26,000 Rets through regular channels next year. A large retail chain has offered to purchase 8,000 Rets If Poloski is willing to accept a 16% discount off the regular price. There would be no soles commissions on this order; thus, variable selling expenses would be slashed by 75%. However , Poloski 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. Polaski Company has no assurance that the retail chain 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 Poloski Company expects to sell only 26,000 Rets through regular channels next year The US Army would like to make a one-time-only purchase of 8,000 Rets. The Army would reimburse Poloski 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 $1.40 per unit. Because the ormy would pick up the Rets with its own trucks, there would be no variable selling expenses associated with this ordet. What is the financial advantage (disadvantage of accepting the US Army's special order? 3. Assume the same situntion as described in (2) above, except that the company expects to sell 34,000 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, what is the financial advantage disadvantage of accepting the US Army's special order? 2 3