Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Andretti Company has a single product called a Dak. The company normally produces and sells 87,000 Daks each year at a selling price of $64
Andretti Company has a single product called a Dak. The company normally produces and sells 87,000 Daks each year at a selling price of $64 per unit. The company's unit costs at this level of activity are given below: Direct materials 5 6.58 Direct labor 19.60 variable manufacturing overhead 3.10 Fixed manufacturing overhead 7.03 ($689,909 total) variable selling expenses 3.76 Fixed selling expenses 3.60 {$261,898 total} Total cost per unit 533-36 [ Req 1A Req 15 Red 2 Req 3 Ken 4A to 4C Req 40 Red 5 An outside manufacturer has offered to produce 37,000 Daks and ship them directlvr to Andretii's customers. If Andretti Companvr accepts this offer, the Facilities that it uses to produce Daks would be idle; however, xed manufacturing overhead costs would be reduced by 30 es. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only twothirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Sunless
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started