12-ALG4

13A-ALG

Andretti Company has a single product called a Dak. The company normally produces and sells 85,000 Daks each year at a selling price of $56 per unit. The company's unit costs at this level of activity are given below: Direct materials $ 8.50 Direct labor 9.00 Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses 3.70 3.00 ($255,000 total) 2.70 4.00 ($340,000 total) $ 30.90 Total cost per unit A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 2. Assume again that Andretti Company has sufficient capacity to produce 102,000 Daks each year. A customer in a foreign market wants to purchase 17,000 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $4.70 per unit and an additional $10,200 for permits and licenses. The only selling costs that would be associated with the order would be $1.30 per unit shipping cost. What is the break-even price per unit on this order? Complete this question by entering your answers in the tabs below. Req 2 Assume again that Andretti Company has sufficient capacity to produce 102,000 Daks each year. A customer in a foreign market wants to purchase 17,000 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $4.70 per unit and an additional $10,200 for permits and licenses. The only selling costs that would be associated with the order would be $1.30 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places.) Show less A Break-even price per unit The Atlantic Medical Clinic can purchase a new computer system that will save $6,000 annually in billing costs. The computer system will last for six years and have no salvage value. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. Required: What is the maximum price (i.e., the price that exactly equals the present value of the annual savings in billing costs) that the Atlantic Medical Clinic should be willing to pay for the new computer system if the clinic's required rate of return is: (Round your final answer to the nearest whole dollar amount.) Maximum Price 1. Nine percent 2. Fourteen percent The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the state's newest millionaire. By choosing | the six winning numbers on last week's state lottery, Mr. Ormsby won the week's grand prize totaling $1.3 million. The State Lottery Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $65,000 each. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. Required: | 1. If Mr. Ormsby can invest money at a 7% rate of return, what is the present value of his winnings? (Enter your answer in dollars and not in millions of dollars.) Present value