PolaskI Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 40,000 Rets per year. Costs assoclated with this level of production and sales are given below: The Rets normally sell for \\( \\$ 55 \\) each. Fixed manufacturing overhead is \\( \\$ 280,000 \\) per year within the range of 31,000 through 40,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 31,000 Rets through regular channels next year. A large retall chaln has offered to purchase 9,000 Rets if Polaskl Is willing to accept a \16 discount off the regular price. There would be no sales commissions on this order, thus, varlable selling expenses would be slashed by \75. However, Polaski Company would have to purchase a speclal machine to engrave the retall chaln's name on the 9,000 units. This machine would cost \\( \\$ 18,000 \\). PolaskI Company has no assurance that the retail chain will purchase additional units in the future. What is the financlal advantage (disadvantage) of accepting the speclal order? (Round your Intermedlate calculations to \\( \\mathbf{2} \\) decimal places.) 2. Refer to the original data. Assume again that Polaski Company expects to sell only 31,000 Rets through regular channels next year. The U.S. Army would llke to make a one-tIme-only purchase of 9,000 Rets. The Army would relmburse Polaskl for all of the varlable 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 unlt. Because the army would plck up the Rets with Its own trucks, there would be no varlable selling expenses assoclated with this order. What is the financlal 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 40,000 Rets through regular channels next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 9,000 Rets. Glven this new Information, what Is the financlal advantage (dIsadvantage) of acceptIng the U.S. Army's speclal order? 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: The following additional Information is avallable: a. The company's plant has a capacity of 115,730 direct labor-hours per year on a single-shift basls. The company's present employees and equipment can produce all five products. b. The direct labor rate of \\( \\$ 7 \\) per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total \\( \\$ 545,000 \\) per year. Varlable overhead costs are \\( \\$ 3 \\) per direct labor-hour. d. All of the company's nonmanufacturing costs are fixed. e. The company's finished goods inventory is negiligible and can be ignored. Required: 1. How many direct labor hours are used to manufacture one unlt of each of the company's five products? 2. How much varlable overhead cost is incurred to manufacture one unlt 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 115,730 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)