Polaski Company manufactures and sells a single product called a Ret.docx

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Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 48,000 Rets per year. Costs associated with this level of production and sales are given below: The Rets normally sell for $51 each. Fixed manufacturing overhead is $336,000 per year within the range of 43,000 through 48,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 43,000 Rets through regular channels next year. A large retail chain has offered to purchase 5,000 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 5,000 units. This machine would cost $10,000. Polaski Company has no assurance that the retail chain will purchase additional units in the future. What is the financial advantage

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