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Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 50,000 Rets per year. Costs

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Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 50,000 Rets per year. Costs associated with this level of production and sales are given below: The Rets normally sell for $60 each. Fixed manufacturing overhead is $450,000 per year within the range of 41,000 through 50.000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 41,000 Rots through regular channels next year, A large retail chain has offered to purchose 9,000 Rets if Polaskd is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order, thus, variable seling expenses would be slashed by 75%. However, Polaskl Company would have to purchase a special machine to engrave the retail chain's name on the 9,000 units. This machine would cost $18,000. Polaski Company has no assurance that the retail chain will purchase your intermediate calculations to 2 decimal places.) 2. Refer to the original data. Assume again that Polaski Company expects to sell only 41,000 Rets through regular channels next year. The US. Army would like to make a one-time-only purchase of 9,000 Rets. The Army would reimburse Polaskl for all of the variable and fixed production costs assigned to the units by the company's absorption reimburse Polaski for aif of the variable and fixed production costs assigned to the unis by the companys absorptich, plus it would pay an additional fee of $1.20 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? 3. Assume the same situation as described in (2) above, except that the company expects to sell 50,000 Rets through regular channels next year. Thus, accepting the U.S. Army's order would require giving up regular 53 les of 9,000 Rets. Given this now information, what is the financlal advantage (disadvantage) of accepting the U.S. Army's special order

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