Polaski Company manufactures and sells a single product...

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Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 36,000 Rets per year. Costs associated with this level of production and sales are given below: Unit $ 20 Direct materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Total $ 720,000 288,000 108,000 324,000 144,000 216,000 $ 1,800,000 $ 50 The Rets normally sell for $55 each. Fixed manufacturing overhead is $324,000 per year within the range of 28,000 through 36,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 28,000 Rets through regular channels next year. A large retail chain has offered to purchase 8,000 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 8.000 units. This machine would cost

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