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Polaski Company manufoctures and sells a single product called a Ret, Operating at capacity, the company can produce and sell 48,000 Rets per year. Costs

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Polaski Company manufoctures and sells a single product called a Ret, Operating at capacity, the company can produce and sell 48,000 Rets per year. Costs associated with this level of production and sales are given below The Rets normally sell for $51 each. Fived manufacturing overhead is $240,000 per year within the range of 40,000 through 48,000 Rets per year. Required: 1. Assume due to a recession, Polaski Company expects to sell only 40,000 Rets through regular channels next year. A large retail chain offered to purchase 8,000 Rets if Polaska wil accept a 16% discount off the regular price. There would be no sales cormmissions on this order, thus, yatiable seling expenses would be slashed by 75%. However, Polaski Company would have to purchase a special machine for $16,000 to engrave the retail chain's name on the 8,000 units. Polaski Company has no assurance that the retal chain will purchase additional units in the future. What is the financial advantage (disadvantage) of accepting the special order? Note: Round your intermediote colculations to 2 decimal places. 2. Refer to the onginal data. Assume Polaski Company expects to sell 40,000 Ress through regular channcis next year. The U.S. Army would like to make a one-time-only purchase of 8,000 Rets. The Army woud reimburse Polaska for all of the variable and fixed production costs assigned to the units by the company s absorption costing system, plus it would pily an additional fee of $120 per unit Becouse 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 US. Amm's special order? 3. Assume the same situation as desicribed in (2) above, except the company expects to sell 48,000 Rets through regular channels next year. This, accepting the US Army's order would require giving up regular sales of 8,000 Rets. Given this new information. what is the finaricial advantage (disadvantage) of accepting the US. Amy's special order

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