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Business, 21.11.2019 19:31 mamieengler

Polaski company manufactures and sells a single product called a ret. operating at capacity, the company can produce and sell 42,000 rets per year. costs associated with this level of production and sales are given below: unit total direct materials $20 $840,000 direct labor 10 420,000 variable manufacturing overhead 3 126,000 fixed manufacturing overhead 9 378,000 variable selling expense 4 168,000 fixed selling expense 6 252,000 total cost $52 $ 2,184,000 refer to the original data. assume again that polaski company expects to sell only 37,000 rets through regular channels next year. the u. s. army would like to make a one-time-only purchase of 5,000 rets. the army would pay a fixed fee of $1.80 per ret, and it would reimburse polaski company for all costs of production (variable and fixed) associated with the units. because the army would pick up the rets with its own trucks, there would be no variable selling expenses associated with this order. if polaski company accepts the order, by how much will profits increase or decrease for the year?

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