Andretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The company's unit costs at this level of activity are given below Direet material Direct labor Variable manafacturing overhead Fixed manufacturing overhead Variable selling expenses Tised selling expenses Total cost per unit 4.50 2.30 5.00 $300,000 total) 3.50 $210,000 total) $26.50 A number of questions relating to the production and sale of Daks follow. Each question is independent Required: 1-a. Assume that Andrett Company has sufficient capacity to produce 90,000 Daks each year without any increase in wed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 60,000 units each year if it were Wiling to increase the fixed selling expenses by $10,000 What is the financial advantage (disadvantage of investing an additional 500,000 in fixed selling expenses? 1-b. Would the additional Investment be justified? 2. Assume again that Andrett Company has sufficient capacity to produce 90,000 Daks each year. A customer in a foreign market wants to purchase 20.000 Daks, Andretti accepts this order it would have to pay import duties on the Daks of $170 per unit and an additional $9,000 for permits and licenses. The only selling costs that would be associated with the order would be $3.20 per unit shipping cost. What is the break-even price per unit on this order? 3. The company has 1000 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 Dakes. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 30% 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, food manufacturing overhead costs would continue at 60% 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 marginwill Andretti forgot closes the plant for two months? b. How iftuch total food cost will the company avoid it closes the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two- month period? - Khu t trng ring an khau liur fee An a. How much total contribution margin wil 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 60,000 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 75%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two- thirds of thelt present amount. What is Andrett'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. Reg 1A Reg 13 Reg 2 Rea Rey 4 to 40 Red 40 Reas Assume that Andrett Company has sufficient capacity to produce 90,000 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 60,000 units each year it were willing to increase the wed selling expenses by $80,000. What is the financial advantage (disadvantage of investing an additional 580,000 in foed selling expenses