Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 24,000 Rets per year. Costs associated with this level of production and sales are as follows: Unit Total Direct materials 5 16.56 $ 396,060 Direct labour 9.56 223,066 Variable manufacturing overhead 4.50 103,060 Fixed manufacturing overhead 10.50 252,060 Variable selling expense 4.60 96,060 Fixed selling expense 6.66 144,066 Total cost 5 51.60 $1,224,060 The Rets normally sell for $56 each. Fixed manufacturing overhead is constant at $252,000 per year within the range of 16,000 through 24,000 Rets per year. Required: 1. Assume that, due to a recession, Polaski Company expects to sell only 16,000 Rets through regular channels next year. A large retail chain has offered to purchase 8,000 Rets if Polaski is willing to accept a price lower than the regular $56. 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 8,000 units. This machine would cost $16,000. Polaski Company has no assurance that the retail chain will purchase additional units any time in the future. Determine the maximum discount that Polaski can offer to this large retail chain in order for it to be no worse off compared to its current prot. [Do not round intermediate calculations. Round your percentage answer to nearest whole number.} 2. Refer to the original data. Assume again that Polaski Company expects to sell only 16,000 Rets through regular channels next year. The Canadian Forces would like to make a onetimeonly purchase of 8,000 Rets. The Forces would pay a xed fee of $1.40 per Ret, and in addition would reimburse Polaski Company for all costs of production [variable and xed} associated with the units. Since the Forces would pick up the Rets with its own trucks, there would be no variable selling expenses of any type associated with this order. If Polaski Company accepts this order, by how much will prots be increased or decreased for the year? [Do not round intermediate calculations.) 1 Refer to the original data. Assume again that Pulaski Company expects to sell only 16,000 Rets through regular channels next year. The Canadian Forces would like to make a onetimepnly purchase of 8,000 Rets. The Forces would pay a xed fee of $1.40 per Ret, and in addition would reimburse Polaski Companyfor all costs of production [variable and xed] associated with the units. Since the Forces would pick up the Rets with its own trucks, there would be no variable selling expenses of any type associated with this order. If Polaski Company accepts this order, by how much will prots be increased or decreased for the year? [Do not round intermediate calculations.} ::l 3. Assume again that Polaski Company expects to sell only 24,000 Rets through regular channels next year. The Canadian Forces would like to make a onetimeonly purchase of 8,000 Rets. The Forces would pay a fixed fee of $1.40 per Ret, and in addition would reimburse Polaski Company for all costs of production {variable and fixed] associated with the units. Thus, accepting the Canadian Forces' order would require giving up regular sales of 8,000 Rets. Since the Forces would pick up the Rets with its own trucks, there would be no variable selling expenses of any type associated with this order. Compute the minimum fixed fee per unit that Polaski must receive from the Canadian Forces {in addition to the reimbursement of production costs] in order to accept this order. [Do not round intermediate calculations} Thalassines Kataskeves, 5A., of Greece, makes marine equipment The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly income statement for the bilge pump product line follows: MINES I(.l"|T.ri5KE\\l'ESJ 5.11. Income StatementBilge Pulp For the Quarter Ended March 31 Sales 958,866 Less: Variable expenses: Variable manufacturing expenses 348,360 Sales commissions 46,366 Shipp i rig 14 , 668 Total variable expenses 468,869 Contribution margin 558,888 Less: Fixed expenses: Advert ising 298 , BBB Depreciation of equipment (no resale value) 98,866 General factory overhead 115,BBB* Salary of productline manager 33,360 Insurance on inventories 13,366 Purchasing department expenses 55,680+ Total fixed expenses 616,889 Net operating loss (56,666] | a: Common costs allocated on the basis of machinehours. TCommon costs allocated on the basis ofsales dollars. The currency in Greece is the euro, denoted by E The discontinuance of the bilge pump product line would not affect sales of other product lines and would have no noticeable effect on the company's total general factory overhead or total purchasing department expenses. Required: Compute the net advantage or disadvantage if the bilge pump product line be discontinued? (Negative amount should be indicated by a minus Sign.) Should the bilge pump product line be discontinued? O Yes O NoSoft and Cuddly Friends [SCF] produces soft dolls. Demand for the dolls is increasing, and management wants you to identify an economical sales and production mix forthe coming year. The following information is available: Softy Friendly Goody Besty Lovey Demand (units) 76,B% 53,590 53,299 53,390 193,493 Price per unit 5 29.% 5 14.% 5 45.% 5 23.% 5 19.% Variable costs: Direct materials 13.75 5.75 19.10 3.00 11.% Direct labour 6.% 3.75 10.50 7.50 3.% The following additional information is available: a. "he company's plant has a capacity of 110,000 direct labourhours per year on a singleshift basis. The company's present employees and equipment can produce all five products. b. "he direct labour rate is $15 per hour; this rate is expected to- remain unchanged during the coming year. c. Fixed manufacturing costs amount to $740,000 per year. Variable overhead costs are $6 per direct labourhour. d. All of the company's sales and administrative costs are xed. Required: 1. How.r many total direct labourhours will be required to produce the units estimated to be sold during the coming yea r? Show your computations. (Round your answers to 2 decimal places.) Softy Friendly 6.... _ a... _ _ 2 Keeping in mind the direct labourhour capacity, what should be the company's product mix for the upcoming year? Prepare a schedule in support of your recommendation. [Round "Per Unit" to 2 decimal places} Friendly Total hours required 3. What is the highest price, in terms of a rate per hour, that SCF would be willing to pay for additional capacity lie, for added direct labour time)? 4. Assume again that the company does not want to reduce sales of any product Identify ways the company could obtain the additional output. [You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Adding another shift Contracting out some work to outside suppliers Em ployin g a dditio nal labour force