Please help Check my workhave to purchase a special machine to engrave the retail chain's name on the 9,000 units. This machine would cost $18,00.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 Polaski Company expects to sell only 35,000 Rets through regular channels nextyear. The U.S. Army would like to make a one-time-only purchase of 9,000 Rets. The Army would pay a fixed fee of $1.80 per Ret,and it would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Because thearmy would pick up the Rets with its own trucks, there would be no variable selling expenses associated with this order. What isthe financial advantage (disadvantage) of accepting the U.S. Army's special order?3. Assume the same situation as described in (2) above, except that the company expects to sell 44,000 Rets through regularchannels next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 9,000 Rets. Given this newinformation, what is the financial advantage (disadvantage) of accepting the U.S. Army's special order?1. Financial advantage2. Financial advantage3. Financial (disadvantage) leck my workPolaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell44,000 Rets per year. Costs associated with this level of production and sales are given below:Unit$ 25TotalDirect materials$ 1,100,000Direct labor6264,000Variable manufacturing overheadFixed manufacturing overheadVariable selling expenseFixed selling expense132,000396, 0004.176, 0006.264,000Total cost$ 53$ 2,332,000The Rets normally sell for $58 each. Fixed manufacturing overhead is $396,000 per year within the range of 35,000 through44,000 Rets per year.Required: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 9,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would beno sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company wouldhave 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.)

Solution 1: Regular Selling price $58.00 Less: Discount 16% Selling price for…

Polaski 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: Unit Total $ 1,100,000 264,000 132,000 396, еее 176,000 264, 000 Direct materials $ 25 Direct labor 6 Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense 3 4. Total cost $ 53 $ 2,332,000 The Rets normally sell for $58 each. Fixed manufacturing overhead is $396,000 per year within the range of 35,000 through 44,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 35,000 Rets through regular channels next year. A large retail chain has offered to purchase 9,000 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 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.)

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q