Andretti Company has a single product called a Dak. The company normally produces and sells 83,000 Daks each year ota sen 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 Vixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 7.50 11.00 2.00 7.00 (5581,000 total) 3.70 4.50 (373,500 total) $35.70 A number of questions relating to the production and sale of Daks follow. Each question is independent Required: 1- Assume that Andrett Company has sufficient capacity to produce 116,200 Daks each year without any ingrosso in fixed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 83,000 units achata were Villing to increase the fixed selling expenses by $100.000. What is the financial advantage (disadvantage) or investing an additional $100.000 in fixed selling expenses? Ib. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 116,200 Dald each year, A customer in a foreon market wants to purchase 33,200 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $170 per unit and an additional $23,240 for permits and licenses. The only selling costs that would be associted with the order would Do $2.50 purut shipping cost. What is the break-even price per unit on this order? 3. The company has 800 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 atribution channes 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 Dats. The strike expected to last for two months. Andrett Company has enough material on hand to operate at 25% of normal levels for the two month period. As an alterative, Andretti could close its plant down entirely for the Iwo months. If the plant were closed, fixed manu acturing overhead costs would continue at 30% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period. 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 it closes the plant for two months Wint is the financial avantana disadvantage of closing the plant for the woman natin? 5. An outside manufacturer has offered to produce 83,000 Daks and ship them directly to Andretti's customers. If Andrett Company accepts this offer, the focilities that it uses to produce Doks 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 prior quoted by the ausies manufacturer