Andretti Company has a single product called a Dak. The company normally produces and sells 89,000 Daks each year at a selling price of $56 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 7.50 10.00 3.20 3.80 ($267,000 total) 3.70 4.60 ($356,000 total) $31.40 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 sufficient capacity to produce 111,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $130,000. What is the financial advantage (disadvantage) of investing an additional $130,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 111,250 Daks each year. A customer in a foreign market wants to purchase 22,250 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $20,025 for permits and licenses. The only selling costs that would be associated with the order would be $1.90 per unit shipping cost. What is the break-even price per unit on this order? 3. The company has 500 Daks on hand that have some irregularities and are therefore considered to be "seconds. Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price? 4. Due to a strike in its supplier's plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period. a. How much total contribution margin will Andretti forgo if it closes the plant for two months? b. How much total fixed cost will the company avoid if it closes the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 89,000 Daks and ship them directly to Andretti's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req3 Req 4A to 4C Req 4D Rec Assume that Andretti Company has sufficient capacity to produce 111,250 Daks each year wi Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2 Reg 3 Req 4A to 4C Reg 4D Reg 5 Assume that Andretti Company has sufficient capacity to produce 111,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $130,000. What is the financial advantage (disadvantage) of investing an additional $130,000 in fixed selling expenses? Show less Reg 1B > Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Reg 2 Reg 3 Req 4A to 4C Reg 4D Reg 5 Assume that Andretti Company has sufficient capacity to produce 111,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $130,000. Would the additional investment be justified? Yes ONO Complete this question by entering your answers in the tabs below. Req1A Req 18 Req 2 Reg 3 Req 4A to 4C Req 4D Reg 5 The company has 500 Daks on hand that have some irregularities and are therefore considered to be "seconds. Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price? (Round your answer to 2 decimal places.) Relevant unit cost per unit Req 4 to 4C > Reg 2 Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Req 2 Reg 3 Req 4A to 4C Req 4D Req5 Assume again that Andretti Company has sufficient capacity to produce 111,250 Daks each year. A customer in a foreign market wants to purchase 22,250 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $20,025 for permits and licenses. The only selling costs that would be associated with the order would be $1.90 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places.) Show less Break-even price per unit Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Req 4 Reg 5 Reg 6 Req 7 Should Silven Industries make or buy the tubes? Make Buy Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 7 What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes ? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Maximum price per box Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6 Reg 7 Instead of sales of 170,000 boxes of tubes, revised estimates show a sales volume of 209,000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $59,000 per year to make the additional 39,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 209,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) ir Silven buys 209,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes ? Show less Make or buy the boxes of tubes? Complete this question by entering your answers in the tabs below. Req1 Reg 2 Reg 3 Reg 4 Reqs Reg 6 Req7 Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.65 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? (Round your intermediate calculations to 2 decimal places.) Number of boxes of tubes manufactured by Silven Number of boxes of tubes purchased from the outside supplier ( Re