3.70 Andretti Company has a single product called a Dok. The company normally produces and sells 83,000 Daks each year at a selling price of 564 per unit. The company's unit costs at this level of activity are given below: Direct materials $ 8.50 Direct labor 8.00 Variable manufacturing overhead 3.50 Fixed manufacturing overhead 6.00 (5498,000 total Variable selling expenses Fixed selling expenses 3.00 (5249.00 total) Total cost per unit $32.70 A number of questions relating to the production and sale of Dakt fotow. Each question is independent Required: 1-a Arcome that Andrett Company has sufficient capacity to produce 116 200 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its units by 40% above the present 83.000 units each year it were Willing to increme the fixed selling expenses by 5110,000. What is the financial advantage dnadvantage of investing an additional $110.000 in fed selling evpenses? 16. Would the additional investment be justified? 2 Asume again that Andrell Company has sufficient capacity to produce 116,200 Das each year. A customer in a foreign market wants to purchase 3.200 Daks Andit accepts this order it would have to pay import duties on the Dals of $270 per unit and an Son 9.920 for parts and licenses. The only selling costs that would be associated with the order would be $230 per unit oing cost. Was the break even orice per unit on this order? The company O Doks on hand that have some regularities and therefore considered to be seconds. Due to the Irregulante be mposible these units of the normal price through regular distribution channels What is the unit cout Egure elevant for setting a minimum selling price 4. Dat we's an Andres Company is unable to purchase more material for the productions. The strike peded to last for two months Andito Comparty has enough material on hand to rate of 2 of normal levels for the women Derved as an alternative, and could cost plant down only for the two months. Ir nepant were closed, manufacturing che costs would continue at 3 of the normal level during the two month period and the dingen wo be ts period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period a. How much total contribution margin Will Andretti forgo if it closes the plant for two months? b. How much total fixed cost will the company avoid if it closes the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 83,000 Daks and ship them directly to Andretti's customers. If Andrett Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, foxed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two thirds of their presentamount What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? BOON Pom References Complete this question by entering your answers in the tabs below. BAGIA Regis Req? Reg 3 Req to 40 Reg 40 Regs Assume that Andretti Company has sufficient capacity to produce 116,200 Daks each year without any increase in Fixed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 83,000 units each year ir were willing to increase the fived selling expenses by $110,000. What is the financial advantage (disadvantage) of investing an additional $110,000 in Fixed selling expenses? Show less d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 83,000 Daks and ship them directly to Andretti's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only twe thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? Book Complete this question by entering your answers in the tabs below. Print eferences Reg LA Reg 13 Reg 2 Req3 Reg 4A to 4C Reg 4D Reg 5 Assume that Andretti Company has sufficient capacity to produce 116,200 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 83,000 units each year it it were willing to increase the fixed selling expenses by $110,000. Would the additional investment be justified? OYes ONO 5. An outside manutacturer has offered to produce 83,000 Daks and ship them directly to Andretti's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? Complete this question by entering your answers in the tabs below. Pet erences Regs Reg 1 Reg 18 Bona 2 Reg 44 to 4C Reg 40 Reg 5 Assume again that Andretti Company has sufficient capacity to produce 116,200 Daks each year. A customer in a foreign market wants to purchase 33,200 Daks. 11 Andretti accepts this order it would have to pay import duties on the Daks of $2.70 per unit and an additional $19,920 for permits and licenses. The only selling costs that would be associated with the order would be $2.10 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places) Show less Breakon price per un c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 83,000 Daks and ship them directly to Andretti's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle, however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two- thirds of their present amount. What is Andrett's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? Complete this question by entering your answers in the tabs below. incos Heq IA Reg 1B Reg 2 Reg 3 Reg 4A to 4C Reg 4D Reg 5 The company has 800 Daks on hand that have some irregularities and are therefore considered to be "seconds. Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price? {Round your answer to 2 decimal places) Relevant un cost per unit Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2 Reg 3 Req 4A to 4C Req 4D Reg 5 Due to a strike in its supplier's plant, Andretti Company is unable to purchase more material for the production of Daks, The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period. (Round number of units produced to the nearest whole number. Round your intermediate calculations and final answers to 2 decimal places. Any losses/reductions should be Indicated by a minus sign.) a. How much total contribution margin will Andretti forgo If it closes the plant for two months? b. How much total fixed cost will the company avoid if it closes the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two month period? Show less Forgone contribution margin Total avoidable fixed conta Finance advantage (disadvantage) R3 Res 40 > reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? Complete this question by entering your answers in the tabs below. ts Boom Reg 1A Reg 13 Reg 2 Reg 3 Reg A to 40 Req 40 Reg 5 Print References Due to a strike in its supplier's plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two month period and the fixed selling expenses would be reduced by 20% during the two-month period, Should Andretti close the plant for two months? Show less Yes No 1 accepts this offer , the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two- thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? nts Complete this question by entering your answers in the tabs below. eBook Reg 1A Reg 18 Reg 2 Req3 Req 4A to 40 P Reg 4D Reg 5 References An outside manufacturer has offered to produce 83,000 Daks and ship them directly to Andretti's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be die; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Show less Avoidable cost per unit