Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell58,000 Rets per year. Costs associated with this level of production and sales are as follows:UnitDirect materialsDirect labour$25.0018.0013.00Total$1,450,0001,044,000754,0001,102,00019.00Variable manufacturing overheadFixed manufacturing overheadVariable selling expenseFixed selling expense4.00232,000348,0006.00Total cost$ 85.00$4,930,000The Rets normally sell for $90 each. Fixed manufacturing overhead is constant at $1,102,000 per year within the range of 33,000through 58,000 Rets per year.Required:1. 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 25,000 Rets if Polaski is willing to accept a price lower than the regular $90. There would be no salescommissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company would have topurchase a special machine to engrave the retail chain's name on the 25,000 units. This machine would cost $50,000. PolaskiCompany has no assurance that the retail chain will purchase additional units any time in the future. Determine the maximum discountthat Polaski can offer to this large retail chain in order for it to be no worse off compared to its current profit. (Do not roundintermediate calculations. Round your percentage answer to nearest whole number.)Maximum discount% 2. Refer to the original data. Assume again that Polaski Company expects to sell only 33,000 Rets through regular channels next year.The Canadian Forces would like to make a one-time-only purchase of 25,000 Rets. The Forces would pay a fixed fee of $3.50 per Ret,and in addition would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Since theForces would pick up the Rets with its own trucks, there would no variable selling expenses of any type associated with this order. IfPolaski Company accepts this order, by how much will profits be increased or decreased for the year? (Do not round intermediatecalculations.)in profits3. Assume again that Polaski Company expects to sell only 58,000 Rets through regular channels next year. The Canadian Forceswould like to make a one-time-only purchase of 25,000 Rets. The Forces would pay a fixed fee of $3.50 per Ret, and in addition wouldreimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Thus, accepting the CanadianForces' order would require giving up regular sales of 25,000 Rets. Since the Forces would pick up the Rets with its own trucks, therewould be no variable selling expenses of any type associated with this order. Compute the minimum fixed fee per unit that Polaskimust receive from the Canadian Forces (in addition to the reimbursement of production costs) in order to accept this order. (Do notround intermediate calculations.)Minimum fixed fee per unit in addition to the reimbursement of production cost

Name: Polaski Company manufactures and sells a single product called a Ret.
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell58,000 Rets per year. Costs associated with this level of production and sales are as follows:UnitDirect materialsDirect lab