Andretti Company has a single product calied a Dok. The company normaliy produces and selis 86,000 . Daks each year at a selling price of $56 per unit. The compery's unit costs at this level of bctivity ore given below: A number of questions relating to the production and sale of Daks follow. Each question is independent: Required: 1. Assume that Andrett Company has sufficient capacity to produce 116,100 Daks each year withour 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. wiling to incresse the fixed seling expenses by $130,000. What is the financlal advantage (disadvantage) of investing an additional $130.000 in fixed seling expenses? 1.b. Wo th the add tiond investment be justified? 2. Ats lme again that Andretti Company has sufticient capacty to produce 116.100 Daks each year. A customer in a foreign market wants 10 purchase 30100 Daks. if Andersi sccepts thit order it would have to poy import duties on the Daks of $170 per unit and an additionsl $21070 for permits and icenses. The only selling costs that would be sssocieted with the order would be 31.40 per unit shipping cost. Whet is the breakeven price per unit on this order? 3. The company has 600 Doks on hand that have some inegularives and are therefore considered to be "seconds " Due to the incguarities, it wil be impossible to sell these unis at the normar peice through regular distribution channels. What is the unit cost figure that is relevant for serting a minimum selling price? 4 Due to a strike in its suppler's pisnt, Andreth Company is unable to purchase more material for the production of Daks The stike is expected to last for two months Andietti Company has enough material on hand to operate at 26 . of normal leveis for the two-month petiod As an aternatve. Andretz cousil ciose as piant down ertieg for the two months. if the plant were closed, fived manutacturing overhesd costs would continue at 30 s of their normal ievel during the two month period and the fixed selling expenses would be reduced by 20 s dining the two-month pefiod 5. An outside mankfacturet has offered to produce 86.0000 aks and ship them directly to Andrettis customers. Ir Andrets company accepts this offer, the facilites that it uses to produce Doks would be idie, however, fored manufacturing overhead costs would bereduced by jox Because the outwide manufacturer would pay for all shipping costs, the variable seling expenses would be only twothirde of their present amount What is Andietis anoidable cost per unit that inould compare to the price quoted by the outside manufacturer? a. How much toral contrbution margin wiv Andrett forgo if it cioses the plant for wo months? b. How much soral fored cost wit the company ovoid if it closes the plsot for two months? c. What is the finacicial advantage (disadvantage) of closing the plant for the two-mionth peciod: d. Should Anioretr close the pient for two months? Complete this gunstion by watering your anvwers in the tabs below, Andretti Company has a single product calied a Dok. The company normaliy produces and selis 86,000 . Daks each year at a selling price of $56 per unit. The compery's unit costs at this level of bctivity ore given below: A number of questions relating to the production and sale of Daks follow. Each question is independent: Required: 1. Assume that Andrett Company has sufficient capacity to produce 116,100 Daks each year withour 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. wiling to incresse the fixed seling expenses by $130,000. What is the financlal advantage (disadvantage) of investing an additional $130.000 in fixed seling expenses? 1.b. Wo th the add tiond investment be justified? 2. Ats lme again that Andretti Company has sufticient capacty to produce 116.100 Daks each year. A customer in a foreign market wants 10 purchase 30100 Daks. if Andersi sccepts thit order it would have to poy import duties on the Daks of $170 per unit and an additionsl $21070 for permits and icenses. The only selling costs that would be sssocieted with the order would be 31.40 per unit shipping cost. Whet is the breakeven price per unit on this order? 3. The company has 600 Doks on hand that have some inegularives and are therefore considered to be "seconds " Due to the incguarities, it wil be impossible to sell these unis at the normar peice through regular distribution channels. What is the unit cost figure that is relevant for serting a minimum selling price? 4 Due to a strike in its suppler's pisnt, Andreth Company is unable to purchase more material for the production of Daks The stike is expected to last for two months Andietti Company has enough material on hand to operate at 26 . of normal leveis for the two-month petiod As an aternatve. Andretz cousil ciose as piant down ertieg for the two months. if the plant were closed, fived manutacturing overhesd costs would continue at 30 s of their normal ievel during the two month period and the fixed selling expenses would be reduced by 20 s dining the two-month pefiod 5. An outside mankfacturet has offered to produce 86.0000 aks and ship them directly to Andrettis customers. Ir Andrets company accepts this offer, the facilites that it uses to produce Doks would be idie, however, fored manufacturing overhead costs would bereduced by jox Because the outwide manufacturer would pay for all shipping costs, the variable seling expenses would be only twothirde of their present amount What is Andietis anoidable cost per unit that inould compare to the price quoted by the outside manufacturer? a. How much toral contrbution margin wiv Andrett forgo if it cioses the plant for wo months? b. How much soral fored cost wit the company ovoid if it closes the plsot for two months? c. What is the finacicial advantage (disadvantage) of closing the plant for the two-mionth peciod: d. Should Anioretr close the pient for two months? Complete this gunstion by watering your anvwers in the tabs below