Andretti Company has a single product called a Dak. The company normally produces and sells 66,000...
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Andretti Company has a single product called a Dak. The company normally produces and sells 66,000 Daks each year at a selling price of $37 per unit. The company's unit costs at this level of activity follow: Direct materials $12.00 Direct labour 6.50 Variable manufacturing overhead Fixed manufacturing overhead 4.30 5.00 $330,000 total Variable selling expenses 1.80 Fixed selling expenses 3.50 $231,000 total $33.10 Total cost per unit 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 100,000 Daks every year without any increase in fixed manufacturing overhead costs. The company currently produces and sells 66,000 units each year. However, it plans to increase the fixed selling expenses by $26,250 in order to increase sales. By how much should sales increase in order to justify the additional $26,250? Please compute the percentage increase in sales. (Do not round intermediate calculations. Round up your "units" answers to the nearest whole number and percentage answer to 2 decimal places.) Increase in sales Percentage increase in sales units % 2. Assume again that Andretti Company has sufficient capacity to produce 100,000 Daks every year. A customer in a foreign market wants to purchase 22,000 Daks. Import duties on the Daks would be $2.10 per unit, and costs for permits and licences would be $9,900. The only selling costs that would be associated with the order would be $3.80 per unit shipping cost. Compute the per-unit break-even price on this order. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Break-even price per unit Andretti Company has a single product called a Dak. The company normally produces and sells 66,000 Daks each year at a selling price of $37 per unit. The company's unit costs at this level of activity follow: Direct materials $12.00 Direct labour 6.50 Variable manufacturing overhead Fixed manufacturing overhead 4.30 5.00 $330,000 total Variable selling expenses 1.80 Fixed selling expenses 3.50 $231,000 total $33.10 Total cost per unit 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 100,000 Daks every year without any increase in fixed manufacturing overhead costs. The company currently produces and sells 66,000 units each year. However, it plans to increase the fixed selling expenses by $26,250 in order to increase sales. By how much should sales increase in order to justify the additional $26,250? Please compute the percentage increase in sales. (Do not round intermediate calculations. Round up your "units" answers to the nearest whole number and percentage answer to 2 decimal places.) Increase in sales Percentage increase in sales units % 2. Assume again that Andretti Company has sufficient capacity to produce 100,000 Daks every year. A customer in a foreign market wants to purchase 22,000 Daks. Import duties on the Daks would be $2.10 per unit, and costs for permits and licences would be $9,900. The only selling costs that would be associated with the order would be $3.80 per unit shipping cost. Compute the per-unit break-even price on this order. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Break-even price per unit
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