Calculate the net increase/decrease in profits next year


Assume that due to a recession, Polaski Company expects to sell only 25,000 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 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 in the future. Calculate the net increase/decrease in profits next year if this special order is accepted

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Calculate the net increase/decrease in profits next year
Reference No:- TGS080065

Expected delivery within 24 Hours