Polaskl Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 44,000 Rets per year. Costs associated with this level of production and sales are given below: Unte $ 20 Direct materials Direct labor Variable manufacturing overhead Yixed manufacturing overhead Variable selling expense selling expense Total $ 880,000 264,000 132,000 308,000 88,000 264,000 $1,936,000 The Rets normally sell for $49 each, Fixed manufacturing overhead is $308,000 per year within the range of 35,000 through 44.000 Rets per year Required: 1. Assume that due to a recession, Polski Company expects to sell only 35.000 Rets through regular channels next year. A large retal Chain has offered to purchase 9,000 Rets of Polaski is willing to accept a 16% discount of 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 9,000 units. This machine would cost $18,000. 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.) 2. Refer to the original data. Assume again that Polask Company expects to sell only 35,000 Rets through regular channels next year, The US Army would like to make a one-time-only purchase of 9.000 Rets. The Army would pay a fixed fee of $10 per Ret and would reimburse Polski Company for all costs of production (variable and fed associated with the units. 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 US Army's Special order? 3. Assume the same situation as described in (2) above, except that the company expects to sell 44,000 Rets through regular channels next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 9.000 Rets. Given this new information what the inancial advantage (disadvantages of accepting the U.S. Army's special order?
https://zactutor.com/wp-content/uploads/2021/03/logo-300x75.png 0 0 developer https://zactutor.com/wp-content/uploads/2021/03/logo-300x75.png developer2022-09-11 22:34:462022-09-11 22:34:46Polaskl Company manufactures and sells a single product called a Ret. Operating at capacity, the com