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Polesk Company manufactures and sells a single product called a Ret Operating at capacity, the company can produce and sell 30,000 Rets per year. Costs

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Polesk Company manufactures and sells a single product called a Ret Operating at capacity, the company can produce and sell 30,000 Rets per year. Costs associated with this level of production and sales are given below Unit $20 Direct waterials Dit labor Variable manufacturing overhead Fixed facturing overhead Variable selling expense Fium selling expense Total cost 3 3 4 Total $ 600.000 300,000 90.000 210,000 120.000 180.000 $1,500,000 5 50 The Rets normally sell for $55 each. Fixed manufacturing overhead is $210,000 per year within the range of 24.000 through 30,000 Rets per year Required: 1. Assume that due to a recession, Polaski Company expects to sell only 24000 Rets through regular channels next year. A large retail chain has offered to purchase 6,000 Rotsit Polaski is willing to accept 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, Poloski Company would have to purchase a special machine to engrave the retail chain's name on the 6,000 unit. This machine would cost $12.000. Polaski Company has no assurance that the retail chain 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 3. Refer to the original data. Assume again that Poloski Company expects to sell only 24.000 Rets through regular charutels next year. The US Army would like to make a one-time only purchase of 6,000 Rets, The Army would remburse polaski for all of the variable and fixed production costs assigned to the units by the company's absorption costing system, plus it would pay on additional fee of $1.40 per unit. Because the army would pick up the Rets with it own trucks, there would be no variable sing expenses associated with this ordet. What is the financial advantage disadvantage of accepting the US Army special order? 3. Assume the same situation as described in (2) above, except that is company specs to sell 20.000 Rets through regular enannels next year Thus, accepting the US Army's order would require giving up regular sales of 6.000 Rets. Given this new information, what is the financial advantage (disadvantage of accepting the US Army's special order

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