Andrett Company has a single product called a Dak. The company normaly produces and sels 86.000 Daks each year at a selling price of $60 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 Andrett Company has sufficient capacity to produce 107,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% abowo the peesent 86,000 units each year if it were willing to increase the foed seling expenses by $140,000. What is the financiol advantage (disadvantage) of investing an additional \$140,000 in fixed selling expenses? 1b. Would the additional investment be justified? 2. Assume again that Andretsi Company has sufficient capacity to produce 107,500 Daks each yeat, A customer in a foreign market wants to purchase 21,500 Daks. If Andrett accepts this order it would have to pay import duties on the Daks of $2.70 per unit and an additional $17,200 for permits and licenses. The only selling costs that would be associated with the order would be $1.80 per unit shipping cost. What is the break-even price per unit on this order? 3. The company has 900 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, Andreti 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 nommalyevels for the two-month period. As an alpernotive, Andretti could close its plant down entirely for the two months. If the plant wire closed, fixed manufacturing overhead costs would continue of 30% of their normal level during the two-month period and the foced 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 wall the company avold 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 manufocturer has offered to produce 86,000 Daks and ship them directly to Andrettr's customers. If Andrett Company accepts this offer, the facilities that it uses to produce Daks would be idie, however, foced manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses wouid 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 manufocturer