Andretti Company has a single product called a Dak. The company normally produces and sels 60,000 Daks each year at a seling price of $32 per unit. The company's unit costs at this level of activity are given below Direct materials Direct labor Variable manufacturing overhead Fooed manufacturing overhead Variable selling expenses Fxed seling expenses S 10.00 4.50 2.30 5.00 ($300 000 total) 1.20 350 ($210000 tota) 26.50 Total cost per unt 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 sutticient capacity to produce 90,000 Daks each year without any increase in foxed manufacturing overhead costs The company could increase its sales by 25% above the present 60,000 units each year it it were willing to increase the fixed selling expenses by $80,000 Cakulate the incremental net operating income 1-4 Assume that Andrell Company has suficent capacly to prokace 90,000 Daks each yea wihoul any icsease in d manua ang overtead cos The Compay could inicase is sales by 25% above the present 60,000 unts each year it it were wiing to increase the fed seling expenses by $00,000 Caculae the incremental net operating icome. Increased sales in units Contribution margin per unt Incremental contribution margin Less added foxed seling expense Incremental net operating income 1-b Would the increased fixed selling expenses be justitied? No Yes 2 Assume again that Andretti Company has sufficient capacity to produce 90,000 Daks each year A customer in a foreign market wants to purchase 20.000 Daks Import duties on the Daks would be $1.70 per unit, and costs for permits and licenses would be $9,000 The only selling costs that would be associated with the order would be $3 20 per unit shipping cost Compute the per unt break even price on this order (Round your answers to 2 decimal places.) Variable manufacturing cost per unit Import duties per unit Permits and licenses Shipping cost per unit 0 00 Break-even price per unit 3. The company has 1,000 Daks on hand that have some ireqularities and are therefore considered to be seconds Due to the iregularities, t will be impossible to sell these unts at the normal price through reqular distribution channels What unit cost figure is relevant for setting a minimum selling price? (Round your answer to 2 decimal places) Relovant unt cost per unit 4. Due to a strike in ts suppier's plant Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months Andrett Company has enough material on hand to operate at 30% of normal levels for the two-month penriod As an altermative. Andretti could close its plant down entrely for the two months. If the plant were closed, fxed manufacturing overhead costts would continue at 60% of ther normal level during the two-month period and the foxed seling expenses would be reduced by 20 % What would be the impact on profits of closing the plant for the two-month period? (Any losses should be indicated by a minus sign) Contribution margin lost Foed costse Faed manufacturing overhead cost 0 Foxed selling cost Net advantage (disadvantage) of closing the plant 5. An outside manufacturer has offered to produce Daks and ship them directly to Andrettr's customers. I Andretti Company accepts this offer, the tacanes that t uses to produce Daks would be idie however, foxed manutacturing overhead costs would be reduced by 75%. Because the outsade manufacturer would pay for all shipping costs, the variable seling expenses would tbe only two-thieds of their present amount Compute the unit cost that can be avoided if purchased from the outside manutacturer. (Do not round intermediate calculations. Round your answers to 2 decimal places) Variable manufacturing cost Foed manudachuring overhead cost Variable sellrng expense 0 00 Total costs avoided