Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell Rets per year. Costs associated with this level of production and sales are given below:

Unit Total

Direct materials $ $

Direct labor

Variable manufacturing overhead

Fixed manufacturing overhead

Variable selling expense

Fixed selling expense

Total cost $ $

The Rets normally sell for $ each. Fixed manufacturing overhead is $ per year within the range of through Rets per year.

Required:

Assume that due to a recession, Polaski Company expects to sell only Rets through regular channels next year. A large retail chain has offered to purchase Rets if Polaski is willing to accept a discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by However, Polaski Company would have to purchase a special machine to engrave the retail chains name on the units. This machine would cost $ 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? Round your intermediate calculations to decimal places.