Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 30,000 Rets per year. Costs associated with this level of production and sales are given below: Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Unit $ 20 $ 600,000 10 300,000 3 90,000 5 150,000 4 6 120,000 180,000 $ 48 $ 1,440,000 The Rets normally sell for $53 each. Fixed manufacturing overhead is $150,000 per year within the range of 23,000 through 30,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 23,000 Rets through regular channels next year. A large retail chain has offered to purchase 7,000 Rets if Polaski is willing 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 7,000 units. This machine would cost $14,000. 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 Polaski Company expects to sell only 23,000 Rets through regular channels next year. The U.S. Army would like to make a one-time-only purchase of 7,000 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 30,000 Rets through regular channels next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 7,000 Rets. Given this new information, what is the financial advantage (disadvantage) of accepting the U.S. Army's special order? warded 09:35 ed Required: 1. Assume that due to a recession, Polaski Company expects to sell only 23,000 Rets through regular ch chain has offered to purchase 7,000 Rets if Polaski is willing to accept a 16% discount off the regular pric commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski purchase a special machine to engrave the retail chain's name on the 7,000 units. This machine would has no assurance that the retail chain will purchase additional units in the future. What is the financial a accepting the special order? (Round your intermediate calculations to 2 decimal places.) 2. Refer to the original data. Assume again that Polaski Company expects to sell only 23,000 Rets throw The U.S. Army would like to make a one-time-only purchase of 7,000 Rets. The Army would reimburse and fixed production costs assigned to the units by the company's absorption costing system, plus it w $1.80 per unit. Because the army would pick up the Rets with its own trucks, there would be no variabl with this order. What is the financial advantage (disadvantage) of accepting the U.S. Army's special ord 3. Assume the same situation as described in (2) above, except that the company expects to sell 30,0 next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 7,000 Rets. G is the financial advantage (disadvantage) of accepting the U.S. Army's special order? 1. Financial advantage $ 54,120 2. Financial advantage $ 49,200x 3. Financial (disadvantage) (58,800) The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: Product arded Debbie Trish Sarah 03 Mike Sewing kit Demand Next year (units) 64,000 56,000 Selling Price per Unit Direct Materials Direct Labor $ 22.00 $ 4.10 $ 3.20 $ 8.00 $ 2.50 $ 1.04 49,000 $ 38.50 $ 8.54 $ 5.60 45,600 339,000 $ 13.00 $ 3.40 $ 4.00 $ 9.40 $ 4.60 $ 0.64 The following additional information is available: a. The company's plant has a capacity of 105,700 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all five products. b. The direct labor rate of $8 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $525,000 per year. Variable overhead costs are $5 per direct labor-hour. d. All of the company's nonmanufacturing costs are fixed. e. The company's finished goods inventory is negligible and can be ignored. Required: 1. How many direct labor hours are used to manufacture one unit of each of the company's five products? 2. How much variable overhead cost is incurred to manufacture one unit of each of the company's five products? 3. What is the contribution margin per direct labor-hour for each of the company's five products? 4. Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? 5. Assuming that the company has made optimal use of its 105,700 direct labor-hours, what is the highest direct labor rate per hour that Walton Toy Company would be willing to pay for additional capacity (that is, for added direct labor time)? ohe unit of each of the company's five products 2. How much variable overhead cost is incurred to manufacture one unit of each of the company's five p 3. What is the contribution margin per direct labor-hour for each of the company's five products? 4. Assuming that direct labor-hours is the company's constraining resource, what is the highest total cont company can earn if it makes optimal use of its constrained resource? 5. Assuming that the company has made optimal use of its 105,700 direct labor-hours, what is the highest that Walton Toy Company would be willing to pay for additional capacity (that is, for added direct labor tim Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 How many direct labor hours are used to manufacture one unit of each of the company's five products? (Do not intermediate calculations. Round your answers to 2 decimal places.) Debbie Direct labor hours per unit 0..4 Trish Sarah Mike Sewing Kit 0.13 0.70 0.50 0.08 Required 1 Required 2 Required: 1. How many direct labor hours are used to manufacture one unit of each of the company's five product 2. How much variable overhead cost is incurred to manufacture one unit of each of the company's five 3. What is the contribution margin per direct labor-hour for each of the company's five products? 4. Assuming that direct labor-hours is the company's constraining resource, what is the highest total cor company can earn if it makes optimal use of its constrained resource? 5. Assuming that the company has made optimal use of its 105,700 direct labor-hours, what is the highes that Walton Toy Company would be willing to pay for additional capacity (that is, for added direct labor tim Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution the company can earn if it makes optimal use of its constrained resource? (Do not round intermediate calculati your final answer to a whole dollar amount.) Highest total contribution margin 6 < Required 3 Required 5 >