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Poleski Company manufactures and sells a single product called a Ret. Operating at capocity, the company can produce and soll 36,000 Rets per yoar Costs

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Poleski Company manufactures and sells a single product called a Ret. Operating at capocity, the company can produce and soll 36,000 Rets per yoar Costs associated with this level of production and sales are given below: Direct material pirect later Weriable namefacturita overheas riked manataeturing owerbeed Warishle, oniling togetse rised oelling expeose Thet al eot The Rets normaly sell for $49 each. Fixed manufacturing overhead is $180,000 per year within the range of 31,000 through 36,000 Rets per year: Required: 1. Assume that due to a recession, Polasks Company expects to sell only 31000 Rets through regular channels next year. A large retal chain has offored to purchase 5,000 Rets if Polaski is wiling to accept a 16 discount off the regular price. There would be no soles commissions on this arder, thus, variable selling expenses would be slashed by 75$ Howevec, Polaski Company would have to purchase a special machine to engrave the retail chain's name on the 5,000 units. This machine would cost $10,000. Polaski Company has no assurance that the retail chain will purchase addicional units in the future. What is the financial advantoge (disadvantage) of accepting the special order? (Round your intermediate calculations to 2 decimal places) 2. Refer to the original data. Assume again that Polaski Company expocts to sell only 31,000 Rets through regular channels next yeac. The US Army would like to make a one-time-only purchase of 5,000 Rets. The Army would reimburse Polaski for all of the variable end fixed profuction costs assigned to the units by the company's absorption costing system, plus it wouid pay on odditional fee of $1.40 per unit. Because the army would pick up the Rets with its own trucks, there would be no variobie seling expenses associated with this ordec. What is the financial advantage (disadvantage) of accepting the US. Army's speciol order? 3. Assume the same situation as described in (2) above, except that the company expects to sell 36,000 Rets through regular channels next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 5,000 Rets. Given this new information, whet is the financial advantage (disadvantage) of accepting the US. Aurmy's special order

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