Jj.156. Polaski Company manufactures and sells a single product called a Ret Operating at capacity, the company can produce and sell42.000 Rets per year. Costs associated with this level of production and sales are given below.Direct materials.Direct laborVariable manufacturing overhead.Fixed manufacturing overheadVariable selling expenseFixed selling expenseTotal costUnit$ 20634246The Rets normally sell for $53 each. Fixed manufacturing overhead is $378,000 per year within the range of 35,000 through 42,000Rets per year.1. Financial advantage2 Financial advantageTotal$ 840,000252,000126,000378,000168,000252,000$2,016,000Required:1. Assume that due to a recession, Polaski Company expects to sell only 35,000 Rets through regular channels next year. A largeretail chain has offered to purchase 7.000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be nosales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company would haveto purchase a special machine to engrave the retail chain's name on the 7,000 units. This machine would cost $14,000. PolaskiCompany has no assurance that the retail chain will purchase additional units in the future. What is the financial advantage(disadvantage) of accepting the special order?Note: Round your intermediate calculations to 2 decimal places.$ 87,640*******2. Refer to the original data. Assume again that Polaski Company expects to sell only 35,000 Rets through regular channels next year.The U.S. Army would like to make a one-time-only purchase of 7,000 Rets. The Army would reimburse Polaski for all of the variableand fixed production costs assigned to the units by the company's absorption costing system, plus it would pay an additional fee of$1.60 per unit. Because the army would pick up the Rets with its own trucks, there would be no variable selling expensesassociated with this order. What is the financial advantage (disadvantage) of accepting the U.S. Army's special order?

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Description: Jj.156. Polaski Company manufactures and sells a single product called a Ret Operating at capacity, the company can produce and sell42.000 Rets per year. Costs associated with this level of production and sales are given below.Direct materials.Direct

The term financial advantage refers to the amount of the incremental profit that the company would…

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plaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 2.000 Rets per year. Costs associated with this level of production and sales are given below. Direct materials Direct labor Variable nanufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Unit $ 20 Total $ 840,000 252,000 126,000 378,000 168,000 252,000 $ 48 $ 2,016,000 e Rets normally sell for $53 each. Fixed manufacturing overhead is $378,000 per year within the range of 35,000 through 42,0 ts per year.

plaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 2.000 Rets per year. Costs associated with this level of production and sales are given below. Direct materials Direct labor Variable nanufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Unit $ 20 Total $ 840,000 252,000 126,000 378,000 168,000 252,000 $ 48 $ 2,016,000 e Rets normally sell for $53 each. Fixed manufacturing overhead is $378,000 per year within the range of 35,000 through 42,0 ts per year.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 7PB: Remarkable Enterprises requires four units of part A for every unit of Al that it produces....

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