Required:

$1.$ Assume that due to a recession, Polaski Company expects to sell only $34,000$ Rets through regular channels next year. A large

retail chain has offered to purchase $8,000$ Rets if 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, Polaski Company would have

to purchase a special machine to engrave the retail chain's name on the $8,000$ units. This machine would cost $$16,000.$ 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?

Note: Round your intermediate calculations to $2$ decimal places.

$2.$ Refer to the original data. Assume again that Polaski Company expects to sell only $34,000$ Rets through regular channels next year.

The U$.$S$.$ Army would like to make a one$-$time$-$only purchase of $8,000$ Rets. The Army would reimburse 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 an additional fee of

$$1\mathrm{.}60$ per unit. Because 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 U$.$S$.$ Army's special order?

$3.$ Assume the same situation as described in $(2)$ above, except that the company expects to sell $42,000$ Rets through regular

channels next year. Thus, accepting the U$.$S$.$ Army's order would require giving up regular sales of $8,000$ Rets. Given this new

information, what is the financial advantage $($disadvantage$)$ of accepting the U$.$S$.$ Army's special order?