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Polaski Company manufactures and sells a single product called a Rer. Operating at capacily the company can produce and sell 32.000 Rets per yesr Costs

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Polaski Company manufactures and sells a single product called a Rer. Operating at capacily the company can produce and sell 32.000 Rets per yesr Costs assodated with this level of produdion and soles are os follows: The Fets normsilly sell for $64 each. Fixed manufacuring ovemead is constant at $400,000 per year within the range of 20,000 through 32000 Reis per year. Pequired: 1. Assume thal due 10 a recessian. Palaski Company expests 10 sell only 20,000 Rets thrcught regular channeto nexi year A large ret ail chain has orrered to purchase 12,000 Rets if Polaskl is willing 10 accept a price lower than the regular $64. There woulc be no s a les commissions on this croer, thus, variable selling expenses would be slashed by 75\%. However, Polaski Campary would have to purchase a s pecial machine ta engrove the retall clain is nome on the 12,000 unilt. This macilne wauld cost $24,000. Folaski Campany has no a courance that the ret ail diain will purchase addtional unns any time in the future Detemine the makimum discount that Polaski can cater to this iarge rerail chain in nearest whode number. 2. Reler to the ongnal data. Assume again that Polaski Company expects to sell only 20,000 Rets through regular channels nex year the Canadan Farces would like to make o one-time only purthase of 12,000 Rets. The Forces would pay a fiked fee of 9200 per Ret, and in

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