6 Andretti Company has a single product called a Dak. The company normally produces and sells 86,000 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 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $8.50 9.00 2.80 3.00 ($258,000 total) 2.70 3.00 ($258,000 total) $29.00 A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 116,100 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 86,000 units each year if it were willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disadvantage) of investing an additional $150,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 116,100 Daks each year. A customer in a foreign market wants to purchase 30,100 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $2.70 per unit and an additional $27,090 for permits and licenses. The only selling costs that would be associated with the order would be $2.50 per unit shipping cost. What is the break-even price per unit on this order?

Andretti Company has a single product called a Dak. The company normally produces and sells 86,000 Daks each year at a selling price of $56 per unit. The company's unit costs at this level of activity are given below: A number of questions relating to the production and sale of Daks follow Each question is independent. Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 116,100 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 86,000 units each year if it were willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disadvantage) of investing an additional $150,000 in fixed selling expenses? 1.b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 116,100 Daks each year. A customer in a foreign market wants to purchase 30,100 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $2.70 per unit and an additional $27,090 for permits and licenses. The only seling costs that would be associated with the order would be $2.50 per unit shipping cost. What is the break-even price per unit on this order