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:

The Rets normally sell for $$49$ each. Fixed manufacturing overhead is $$322,000$ per year within the range of

$38,000$ through $46,000$ Rets per year.

Required:

Assume due to a recession, Polaski Company expects to sell only $38,000$ Rets through regular channels

next year. A large retail chain offered to purchase $8,000$ Rets if Polaski will 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 for $$16,000$ to

engrave the retail chain's name on the $8,000$ units. 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?

Note: Round your intermediate calculations to $2$ decimal places.

Refer to the original data. Assume Polaski Company expects to sell $38,000$ Rets through regular channels

next year. The U$.$S$.$ Army would like to make a one$-$time$-$only purchase of $8,000$ 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\mathrm{.}60$ 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?

Assume the same situation as described in $(2)$ above, except the company expects to sell $46,000$ 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 U$.$S$.$ Army's special order?