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 40,000 Rets per year. Costs associated with this levelof production and sales are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Unit Total $ 20 $800,000 240,000 120,000 360,000 160.000 240,000 moto Total cost $ 48 $1,920,000 The Rets normally sell for $53 each. Fixed manufacturing overhead is constant at $360,000 per year within the range of 33,000 through 40,000 Rets per year. Required: Assume that due to a recession, Polaski Company expects to sell only 33,000 Rets through regular channels next year. A large retailchain has offered to purchase 7,000 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 7,000 units. This

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