(Answered) : Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 46

Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 46,000 Rets per year. Costs associated with this level of production and sales are given below:

Unit Total
Direct materials $ 20 $ 920,000
Direct labor 6 276,000
Variable manufacturing overhead 3 138,000
Fixed manufacturing overhead 5 230,000
Variable selling expense 2 92,000
Fixed selling expense 6 276,000
Total cost $ 42 $ 1,932,000
The Rets normally sell for $47 each. Fixed manufacturing overhead is $230,000 per year within the range of 36,000 through 46,000 Rets per year.

1. Refer to the original data. Assume again that Polaski Company expects to sell only 36,000 Rets through regular channels next year. The U.S. Army would like to make a one-time-only