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Polaski Company manutactures and sells a single product called a Ret Operating at capocity, the company can produce and sell 40,000 Rets per year. Costs

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Polaski Company manutactures and sells a single product called a Ret Operating at capocity, 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 sel for $51 each. Fixed manufacturing ovethead is $200.000 per year within the ranye of 33,000 through 40,000 Retsperyear Required: 1. Astume that dve to a recession, Polaski Company eppects to sell only 33,000 Rets through regular channeis next year, A large retail chain tas offered to purchase 7000 Rets ir Polaski is wiling to accept a 16 k discount off the regular price. There would be no salps commissions on this order, thus, variable selling expenses would be stashed by 75%. However, Polaski Compony would have to purchase a speciol mochine to engrave the retail chain's name on the 7,000 units. This mechine would cost 514,000 . Polaski Company has no assurance that the retail chain wur purchase additsonat units in the future. What is the financial advantage (disadvantage) of eccepting the special order? (Hound your intermediate catcutations to 2 decimal places.) 2. Pefer to the oeiginsl dath. Assume again that Polaski Conpary expects to selt only 33.000 Rets through regular channels next year. The U5. Army would like to make a one-time-only purchase of 7.000 Rats. The Army woud reimburse Polaski for all of the variable and fised production costs asigned to the units by the companys absorption costing syatem, plus if would pay an additional fee of $120 per unit Because the army would pick up the Rets with its own trucks, there would be no variable selling expenses associated 3 Aswume the same situation as descrbed in (2) above, except that the company expects to selt 40,000 Rets through regutar channeis hext year. Thus, accepting the US. Arryris order would requie giving up regular sales of 7000 Rets. Given this new information, what is the financlat advantage (dishdvantage) of occepting the U.S. A.my's speciat order

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