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Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce a 32.000 Rets per year. Costs associated

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Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce a 32.000 Rets per year. Costs associated with this level of production and sales are given below Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost $ 20 $ 640,000 192,000 6,000 160,000 128,000 6192,000 S 441.408.000 The Rets normally sell for $49 each. Fixed manufacturing overhead is $160000 per year within the range of 24,000 through manufacturing overhead is $160,000 per year within the range of 24,000 through Rets per year Required 1 Assume that due to a recession, Polaski Company expects to sell only 24,000 Rets through regular channels next year A chain has offered to purchase 8,000 Rets if Polaski is will commissions on this order, thus, variable selling ex purchase a special machine to engrave the retail chain's name on the 8,000 units. This machine would cost $16,000. Polaski ing to accept a 16% discount off the regular price. There would be n penses would be slashed by 75% However, Polaski Company would have s no assurance that the retail chain will purchase additional units in the future What is the financial advantage (disadvantag accepting the special order? (Round your intermediate calculations to 2 decimal a. Assume again that Polaski Company expects to sell only 24,000 Rets through regular channels n 1.20 per Ret, ar any for all costs of production (variable and fixed) associated with the units, Because the armyw The U.S. Army would like to make a one-time-only purchase of 8 000 Rets. The Army would pay a fixed fee of:$ would reimburse Polaski pick up the Rets with its own trucks, there advantage (disadvantage) of accepting the U.S would be no variable selling expenses associated with this order What is the financi Armys special order? he same situation as described in (2) above, except that the company expects to sel 32000 Rets throug 3. Assume next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 8,000 rear Rets. Given this new information the financial advantage (disadvantage) of accepting the US. Armys special order? advantage F4

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