A Fn N 4 n/i 1% 0.9901 0.9803 0.9706 N 01960 --30 U Present Value Tables Single Sum PROBLEM 6-19 Relevant Cost Analysis in a variety of Situations LO 6-2, LO 6-3, LO 6-4 Andretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The company's unit costs at this level of activity are given below: 6% 5% 0.9070 0.9804 0.9709 0.9615 0.9524 0.9434 se 4% 0.9246 0.880 0.9426 0.9151 0.9612 0.9423 0.9238 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $10.00 4.50 2.30 5.00 1.20 3.50 $26.50 ($300.000 total) ($210,000 total) A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1. Assume Andretti Company has sufficient capacity to produce 90,000 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 60,000 units each year if it were willing to increase the fixed selling expenses by $80,000. What is the financial advantage (disadvantage) of investing an additional $80,000 in fixed selling expenses? Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 90,000 Daks each year. A customer in a foreign market wants to purchase 20,000 Daks. If Andretti accepts this order, it would have to pay import duties on the Daks of $1.70 per unit and an additional $9,000 for permits and licenses. The only selling costs that would be associated with the order would be $3.20 per unit shipping cost. What is the break-even price per unit on this order? d to be "seconds." Due to the Stude

Required expeases? Would the additional inestment be juatifed? idditional $9,000 for permits and licenses. The only selling costs that would be associated with the order would be $3.20 pet unis Required expeases? Would the additional inestment be juatifed? idditional $9,000 for permits and licenses. The only selling costs that would be associated with the order would be $3.20 pet unis