Andrett Company has a single product called a Dak, The company nomaly produces and sells a5,000 Daks each year at a sesting price of 554 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: Ha. Assume that Andrett Company has sufficient capacty to peoduce 106,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the pcesent 85,000 units each year if it were Willing to increase the faed seling expenses by $120,000. What is the financial actvantage (disadvantage/ of inwesting an additional $120 oc0 in fixed selling expenses? 10. Would the additional imvestment be justified? 2. Assume again that Andrewi Company has sufficient capacity to produce 106,250 Daks each year, A customer in a fore-gn market wants to purchase 21,250 Daks. If Andrett accepts this order it would have to pay import dutes on the Daks of $4.70 per unit and an additional $14,875 for permits and licenses. The only selling costs that would be associated with the order would be 51.90 per und shipping cost. What is the break-even price per unit on this order? 3. The company has 800 Daks on hand that have some irregulanities and are thetefore considered to be "seconds."Due to the irregularities. it will be impossible to sel these units at the normal price through regular distibution channels. What is the unit cost figure that is relevart for setting a minimum selling price? 4. Due to a strike in its supplier's plant, Andrett Company is unabie 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 penod. As an alfernative, Andretti could close its plant down entirely for the two months. overhend costs would continue at 35% of their normal level during the two-month period and the fixed sellog expenses would be reduced by 20% during the two-month period e. How much total contribution margin will Andretti foego if it closes the plant for two months? b. How much total fixed cost will the company avoid if it closes the plans for two months? c. What is the financlal 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 85,000 Daks and ship them directly to Andrettis customers. If Andreit Company accepts this ofler, the fociles that it uses to produce Daks would be idie; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outsde manufacturer would poy for all shipping costs, the variable seling expenses would be only twothirds of their present amount. What is Andretu's aveidable cost per unit that it should compare to the price quosed by the outside manufacturer? Complete this question by entering your answers in the tabs below. Dve to a utghe in as supplier's plant, Andrets Comgany is unable to purthase more materlal for the preduction of Daks. The strice is expected to last for two merths. Andrets Corrgany has enough material en hand to eperate ot 25% of normal levels for the twp-month period. As an alternative, Andreti could dose its plant down eneirely for the two months. if the plant nere ciesed, fiesd matufecturing overteded coats would cencinue at 35% of their normal level during the two-month period and the fased seling expenses would be reduckd by 20% durisg the two-month penod. (Round mumber of units produced to the hearest whale mimber. Rpitid your indermediote calculations and final anawers to 2 decimal places. Any losseviesuctiens whosid be andicated ly a mines nigh) 2. Hew mach total coceribution margin wil Andevas forge if it closes the plant for the menths? b. Hom nivch tocal ficed coot wil the company dveid if it clotes the plant for tw manthe? c What is the fenandal advantage (disadvantege) of diesing the plant for the two-mewth peried