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Polaskl Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 32,000 Rets per year. Costs assoclated with this level of production and sales are given below: The Rets normally sell for $46 each. Fixed manufacturing overhead is $224,000 per year withln the range of 24,000 through 32,000 Rets per year. Requlred: 1. Assume due to a recession, Polaskl Company expects to sell only 24,000 Rets through regular channels next year. A large retall chain offered to purchase 8,000 Rets If Polaskl will accept a 16% discount off the regular price. There would be no sales commissions on this order, thus, varlable selling expenses would be slashed by 75%. However, Polaski Company would have to purchase a speclal machine for $16,000 to engrave the retall chain's name on the 8,000 unlts. Polaskl Company has no assurance that the retall chain will purchase additional units in the future. What is the financlal advantage (disadvantage) of accepting the speclal order? Note: Round your Intermedlate calculations to 2 decimal places. 2. Refer to the original data. Assume Polaski Company expects to sell 24,000 Rets through regular channels next year. The U.S. Army would like to make a one-tlme-only purchase of 8,000 Rets. The Army would relmburse Polaskl for all of the varlable and fixed production costs assigned to the units by the company's absorption costing system, plus it would pay an additional fee of $1.80 per unlt. Because the army would pick up the Rets with its own trucks, there would be no varlable selling expenses assoclated with this order. What is the financlal advantage (dlsadvantage) of accepting the U.S. Army's speclal order? 3. Assume the same situation as described In (2) above, except the company expects to sell 32,000 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 financlal advantage (disadvantage) of accepting the U.S. Army's speclal order

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