Polaski company manufactures and sells a single

This preview shows page 16 - 18 out of 33 pages.

Polaski Company manufactures and sells a single product called a Ret. Operating at caUnitTotalDirect materials$20.00$600,000.00Direct labor$8.00$240,000.00Variable manufacturing overhead$3.00$90,000.00Fixed manufacturing overhead$5.00$150,000.00Variable selling expense$2.00$60,000.00Fixed selling expense$6.00$180,000.00Total cost$44.00$1,320,000.00The Rets normally sell for $49 each. Fixed manufacturing overhead is constant at $150Required:1- Assume that due to a recession, Polaski Company expects to sell only 20,000 Rets t
3- Assume the same situation as that described in (2) above, except that the company Sales:From the U.S. Army (above)$378,000.00From regular channels ($49 per unit × 10,000 units)$490,000.00Net decrease in revenue$112,000.00Less variable selling expenses avoided if the Army’s orderis accepted ($2 per unit × 10,000 units)$20,000.00Net decrease in profits if the Army’s order is accepted$92,000.00Net profitdecreaseby

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture