Problem 11-22 (Algo) Special Order Decisions [LO11-4] Poctoki Company manufoctures and selis a single probuct called a Ret, Operating at copacify, the company can produce and sell 38,000 frets per year. Costs associated wath this level of production and sales are given below: The Rets normally sell for $55 each. Fixed manufacturing overhead is $266,000 per year within the range of 32,000 through 38,000 Rets peryear Required: 1. Assume that due to a recession. Polaski Company expects to sel only 32,000 Rets through regular channels next year A large retail chan has offered to purchase 6,000 Rets if Polaski is wiling to accept a 16% discount off the regilar price. There woukd be no sales: commissions on this order, thus, variabie selling expenses would be slashed by 75%. However, Polaski Company would hove to purchase a speciat machine to engrave the retall chain's name on the 6,000 units. This machine would cost $12,000. Polaski Company has no assurance that the retait chain will purchase additionsit units in the tuture. What is the finandal advantage (disadvantage) of acceping the special order? (Round your intermediate calculations to 2 decimal ploces.) 2. Refer to the original data Assume again that Polaski Company expects to sell only 32,000 Rets through regular channeis next year. The U.5. Amry would like to mlake a one-time-only purchase of 6.000 Rets. The Amy would reimburse Polaski for all of the variable and fived production costs assigned to the units by the companys absorption costing system, plus it would pay an additionat fee of $160 per unit. Because the army would pick up the Rets witt its own trucks, there would be no variable seling expenses assocated with: this order. What is the financial advantage (disadvartage) of accepting the U.S. Army's special order? 3. As sume the same situation as described in (2) above, except that the company expects to seli 38,000 Rets through iegular channels next vear Thus, accepting the US Ainy/s order would tequire ginng up regular sales of 6.000 Rets. Given this new inforitiatiory what b the firancus actvantage tdisadvantage) of accepting the US Army's special order