Andretti Company has a single product called a Dak. The company normally produces and sells price of $62 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 $8.50 11.00 3.10 7.00 ($595,000 total) 2.70 2.50 ($212,500 total) $ 34.80 A number of questions relating to the production and sale of Daks follow. Each question is inde Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 114,750 Daks each year w manufacturing overhead costs. The company could increase its unit sales by 35% above the pre willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disa $150,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 114.750 Daks each ye wants to purchase 29.750 Daks. If Andretti accepts this order it would have to pay import duties additional $17.850 for permits and licenses. The only sellina costs that would be associated with Andretti Company has a single product called a Dak. The company normally produces and sells price of $62 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 $8.50 11.00 3.10 7.00 ($595,000 total) 2.70 2.50 ($212,500 total) $ 34.80 A number of questions relating to the production and sale of Daks follow. Each question is inde Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 114,750 Daks each year w manufacturing overhead costs. The company could increase its unit sales by 35% above the pre willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disa $150,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 114.750 Daks each ye wants to purchase 29.750 Daks. If Andretti accepts this order it would have to pay import duties additional $17.850 for permits and licenses. The only sellina costs that would be associated with