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Assume that due to a recession, Polaski Company expects to sell only 39,000 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 chains 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 (disadvantage) of accepting the special order? (Round your intermediate calculations to 2 decimal places.)

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Polaski Company manufactures and sells a single product called a Ret. Opera capacity, the company can produce and sell 44,000 Rets per year this level of production and sales are given below The Rets normally sell for $51 each Fixed manufacturing Variable manufacturing overhead is $308,000 per Fixed manufacturing year within the range of 39,000 through 44,000 Rets per year ting at associated with . Costs Unit Total Direct materials Direct labor $20 $ 880,0ee 264,00e 132,eee 388, 176,e0e 6 3 overhead 7 overhead Variable selling expense Fixed selling expense Total cost 4 6 264 , $46 $2,024,eee

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