Andretti Company has a single product called a Dak. The company normally produces and sells 75,000 Daks each year at a selling price of $47 per unit. The company's unit costs at this level of activity follow $15.00 Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses 9.50 7.30 5.00 $375,000 total 2.70 3.50 $262,500 total Total cost per unit $43.00 A number of questions relating to the production and sale of Daks follow. Consider each question separately. Required 1. Assume that Andretti Company has sufficient capacity to produce 150,000 Daks every year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the present 75,000 units each year if it were willing to increase the fixed selling expenses by $28,125 a. Calculate the incremental net operating income. (Do not round intermediate calculations.) Incremental net operating income b. Would the increased fixed expenses be justified? Yes 0