excel PROBLEM 9-5 Determining Whether to Accept or Reject a Special Order [LO1-CC5 Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 30,000 Rets per year. Costs associated with this level of production and sales are as follows: CHECK FIGURE CNet increase in ( profits: $65,000 Unit Total S 450,000 240,000 90,000 270,000 120,000 $15 Direct materials Direct labour Variable manufacturing overbead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost S45 S1,350,000 The Rets pormally sll for S50 each. Fixed manufacturing overhead is constant at $270,000 per year within the rangeC of 25,000 through 30,000 Rets per year Required: 1. Assume that, due to a recession, Polaski Company expects to sell only 25.000 Rets through regular channels C 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, Polski Company would have to purchase a special machine to engrave the retail chain's 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 any time in the future. Determine the impact oa profits next year if this special order is accepted 2. Refer to the original data. Assume again that Polaski Company expects to sell only 25,000 Rets through regular channels next year. The Canadian Forces would like to make a one-time-only purchase of 5.000 Rets. The Forces would pay a fixed fee of $1.80 per Ret, and in addition it would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Since the Forces would pick up the Rets with its own trucks, there would be no variable selling expenses of any type associated with this order. If Polask Company accepts this order, by how much will profits be increased or decreased for the year? i 3. Assume the same situation as that described in part (2), except that the company expects to sell 30,000 Rets through regular channels next year. Thus, accepting the Canadian Forces' order would require giving up regular sales of 5.000 Rets. If the Forces' order is accepted, by how much will profits be increased or decreased from what they would be if the 5,000 Rets were sold through regular channels