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Andretti Company has a single product called a Dak. The company normally produces and sells 89,000 Daks each year at a selling price of $62 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 106,800 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase iss unit sales by 20% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed seling expenses? 1.b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 106.800 Daks each year. A customer in a foreign market wants to purchase 17,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $370 per unit and an additional $12,460 for permits and licenses. The only selling costs that would be associated with the order would be $150 per unit shipping cost. What is the break-even price per unit on this order? 3 The company has 800 Daks on hand that have some irregularties 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? 4. 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 ins 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 89,000 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, fored 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. Assume that Andretti Company has sufficient capadity to produce 106,800 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed selling expenses? Andretti Company has a single product called a Dak. The company normally produces and sells 89,000 Daks each year at a selling price of \$62 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 106,800 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed selling expenses? 1.b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 106,800 Daks each year. A customer in a foreign market wants to purchase 17,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $370 per unit and an additional $12,460 for permits and licenses. The only selling costs that would be associated with the order would be $1.50 per unit shipping cost. What is the break-even price per unit on this order? 3. 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? 4. Due to a strike in its supplier's plant, Andrett 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 ciose its plant down entirely for the two months. If the plant were closed, fioed 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 89,000 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 twothirds of their present amount. What is Andrett's avoidable cost per unit that it should compare to the price quoted by the outside manufacture? Complete this question by entering your answers in the tabs below. Assume that Andretti Company has sufficient capacity to produce 106,800 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $140,000. Would the additional investment be justified? Andretti Company has a single product called a Dak. The company normally produces and sells 89,000 Daks each year at a selling price of $62 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 106,800 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 89.000 units each year if it were willing to increase the foxed selling expenses by $140.000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed selling expenses? 1.b. Would the additional investment be justified? 2 Assume again that Andretti Company has sufficient capacity to produce 106,800 Daks each year. A customer in a foreign market wants to purchase 17,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $370 per unit and an additional $12,460 for permas and licenses. The only selling costs that would be associated with the order would be $1.50 per unit. shipping cost. What is the break-even price per unit on this order? 3. The company has 800 Daks on hand that have some irregularities and are therefore considered to be "seconds." Due to the irregularities, if wil be impossible to sell these units at the notmal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price? 4. 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 ciosed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two month period and the foxed selling expenses would be reduced by 20% during the two-month period. a. How much total contribution margin will Andrett 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 monthis? 5. An outside manufacturer has offered to produce 89,000 Daks and ship them directly to Andreta's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, foved 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 twothirds of their present amount. What is Andreftr'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. Assume again that Andretti Company has sufficient capacty to produce 106,800 Daks each year, A customer in a foreign market wants to purchase 17,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $12,460 for permits and licenses. The only selling costs that would be associated with the order would be $1.50 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places:) Andretti Company has a single product called a Dak. The company normally produces and sells 89,000 Daks each year at a seling price of $62 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 106,800 Daks each year without any increase in ficed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 89,000 units each year if it were willing to increase the foced selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140.000 in foxed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 106,800 Daks each year. A customer in a foreign market wants to purchase 17,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $12,460 for permits and licenses. The only selling costs that would be associated with the order would be $1.50 per unit shipping cost. What is the break-even price per unit on this order? 3. 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? 4. 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, foxed 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 89,000 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 twothirds 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. 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.) Andretti Company has a single product called a Dak. The company normally produces and sells 89.000 Daks each year at a selling price of $62 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 Andrefti Company has sufficient capacity to produce 106,800 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 89.000 units each year if it were waling to increase the fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed seling expenses? 1.b. Would the additional imvestment be justified? 2 Assume again that Andretti Company has sufficient capacity to produce 106,800 Daks each year. A customer in a foreign market wants to purchase 17,800 Daks. If Andrett accepts this order it would have to pay import duties on the Daks of $370 per unit and an additional $12,460 for permits and licenses. The only selling costs that would be associated with the order would be $1.50 per unit shipping cost What is the breakeven price per unit on this order? 3. 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? 4. 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 fwo months. Andretti Comparyy has enough materiai on hand to operate at 25% of normal levels for the two-month penod 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 penod and the fored selling expenses would be reduced by 20% during the two-month period. a. How much total contribution margin will Andrett 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 89.000 Daks and ship them directly to Andrett's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle, however, foced 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 Andrettr'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. Due to a strike in its supplier's plant, Andretti Compary is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Compary has enough material on hand to operate at 25% of normal levels for the two-month period. As an altemative, 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 pariod and the fixed selling expenses would be reduced by 20% during the two-month period. (Round number of unilts produced to the nearest whole number. Round your intermediate calculations and final answers to 2 decirnal places. Any losses or 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 closos the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? Andretti Company has a single product called a Dak. The company noimally produces and sells 89,000 Daks each year at a selling price of $62 per unit. The compony'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: Ta. Assume that Andretti Company has sufficient capacity to produce 106,800 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unif sales by 20% above the present 89,000 units each year if it were willing to increase the foxed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in foxed selling expenses? 1.6. Would the additional investment be justified? 2 Assume again that Andretti Company has sufficient capacity to produce 106,800 Daks each year. A customer in a foreign market wants to purchase 17,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $370 per unit and an additional $12.460 for permits and licenses. The only selling costs that would be associated with the order would be $1.50 per unit shipping cost. What is the break-even price per unit on this order? 3. The company has 800 Daks on hand that have some irregularties 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? 4. 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, foxed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fored 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 fwo-month period? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 89,000 Daks and ship them directly to Andrett's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fored 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 twothirds of their present amount. What is Andrettr's avoidable cost per unit that if should compare to the price quoted by the outside manufacturer? Complete this question by entering your answers in the tabs below. 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? Andretti Company has a single product called a Dak. The company normally produces and sells 89.000 Daks each year at a selling price of $62 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 sutficient capacity to produce 106,800 Daks each year without any increase in fuxed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed selling expenses? 1.b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 106,800 Daks each year. A customer in a foreign market wants to purchase 17.800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $12,460 for permits and licenses. The only selling costs that would be associated with the order would be $1.50 per unit shipping cost. What is the breakeven price per unit on this order? 3. 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? 4. 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. a. How much total contribution margin will Andretu forgo if it cioses the plant for two months? b. How much total fixed cost will the company avoid if it doses 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 89,000 Daks and ship them directly to Andretti's customers. If Andrett Company accepts this offer, the facilties 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 twothirds 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. An outside manufacturer has offered to produce 89,000 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? (Do not round intermediate calculations, Round your answers to 2 decimal places.)