Polaski Company manufactures and sets a single product called a Ret Operating at capacity, the company can produce and sel 50,000 Rets per year. Costs associated with this level of production and sales are given below Direct materiais Direct liber Variable manufacturing overhead Wixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Total $ 20 $1,000,000 400,00 > 150,00 se, 200.000 100 $ 12,600, The Rets normally sell for $53 each. Rxed manufacturing overheads $350,000 per year within the range of 42.000 through 50,000 Rets per year Required: 1 Alcume that our to a recession Polak Company expects to sell only 42.000 Rets through regular channels next year. A large rett chain as offered to purchase 8,000 Rets i Polsko is willing to accept a 10% discount of the regular once. There would be no sales commissions on this order, thus, variable selling expenses would be thed by 75%. However, Polak Company would have to purchase a special machine to engrave the retail chain's name on the 8,000 units. This machine would cost $10,000 Polski Company has no assurance that the retail chain will purchase adormonal 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 originaldate Assume again that polaska Company expects to sell only 42.000 Rets through regular channels next year The US Army would like to make a one-time-only purchase of 8.000 Rets. The Army would reimburse Polak for all of the variable and foed production costs assigned to the units by the company's absorption costing system, plus it would pay an additional fee of $2.00 per unit. Because the army would pick up the Rets with its own trucks, there would be no variable setting expenses associated with this order What is the financial advantage disadvantage of accepting the US 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 US Army sonder would require giving up regular sales of 8,000 Rets Given this new information Wit is the financial advantage disadvantages of accepting the US Army's special ordert |