Net increase in profit = Minimum fixed fee per unit in addition to the reimbursement of production cost =

Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 24,000 Rets per year. Costs associated with this level of production and sales are as follows: Unit Total Direct materials $16.50 $ 396, 000 Direct labour 9. 50 228, 000 Variable manufacturing overhead 4.50 108, 000 Fixed manufacturing overhead 10.50 252, 000 Variable selling expense A 4.00 96, 000 Fixed selling expense 6.00 144, 000 Total cost $51. 00 $1, 224, 000 The Rets normally sell for $56 each. Fixed manufacturing overhead is constant at $252,000 per year within the range of 16,000 through 24,000 Rets per year. Required