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Polaski Company manufactures and sells a single product called o Ret. Operating at copacity, the company can produce and sell 40.000 Rets per year. Costs

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Polaski Company manufactures and sells a single product called o Ret. Operating at copacity, the company can produce and sell 40.000 Rets per year. Costs associated with this level of production and sales are given below: The Rets normally sell for $58 each. Fixed manufacturing overhead is $280,000 per year within the range of 31,000 through 40,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 31.000 Rets through regular channels next year. A large retail chain hos offered to purchase 9,000 Rets if Polaski is wiling to occept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company would have to purchose a special machine to engrave the retoll chain's name on the 9.000 units. This machine would cost $18,000. Polaski Company hos no assuronce that the retail choin will purchase additional units in the future. What is the financial advantage (disadvantage) of accepting the special order? (Round your Intermediate calculations to 2 decimal places.) 2. Refer to the original data. Assume agoin that Polaski Company expects to sell only 31,000 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 Polaski for all of the variable ond fixed production costs assigned to the units by the company's obsorption costing system, plus it would pay on adilionol fee of $1.80 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 situotion as described in (2) above, except that the company expects to sell 40,000 Rets through regular channels next year. Thus, accepting the U.S. Army's order would require giving up regular soles of 9,000 Rets. Given this new information, what is the financial advantage (disadvantage) of occepting the U.S. Amy's special order

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