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 Direct materials Direct labor Varlable mansfacturing overhead Fixed marsfacturing overhead Variable selling expenses Fixed selling egentes s 18.80 4. 50 2.30 5.00 (sse0,eoo total) 20 Total cost per unit 26,50 A number of questions relating to the production and sale of Daks follow Each question is Required ent 1 a Assume that Andretti Company has sufficient capacity to produce 90.000 Daks each year without any Increase in fixed manufacturing overhead costs. The company could increase its unt sales by 25% alove the present boooo units each year rit were willing to increase the fixed selling expenses by $80000. What is the tinancial ailiventage (diadvntage) of Investing an addiionat $80,000 In fixed selling experises? 1b Would the additional investment be justified? 2 Assume again that Andretti Company has sufficient capacity to procuce 90000 Daks each year. A customer in a foreign market wants to purchase 20000 Daks. If Andretti accegts this orgerit would have to pay ipot duties n that Required 1-a. Assume that Andretti Company has sufficient capacity to produce 90,000 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its u nit sales by 25% a ove the present 6000 unts each year if it were lling expenses by $80,000. What is the financial advantage (disadvantage) of inv lling to increase the fixed sel $80,000 in fixed selling expenses? 1-b. Would the additional Investment be justified? 2 Assume again that Andretti Company has sufficient capac wants to purchase 20.000 Daks.If Andretti accepts this order it would have to pay import duties on the Daks o additional $9,000 for permits and licenses. The only selling costs that would be associated with the order would be $3.20 per unit ity to produce 90,000 Daks each year. A customer in a foreign market f $1.70 per unit and an shipping cost. What is the break-even price per unit on this order? 3. The company has 1,000 Daks on hand that have some irregularities and are therefore considered to Irregularities, it will be impossible to sell these units at the normal price through regular distribution channe be "seconds." Due to the 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 producti on of Daks. The strike is xpected to last for two months. Andretti Company has enough material on hand to operate at 30% of normal levels for the two month riod. 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 60% of ther normal level during the two month period and the fixed selling expenses would be duced 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 avold if it closes the plant for two months? c. What is the financial advantage (disadvantagel of closing the plant for the two-month period? Should Andretti close the plant for two months? An outside manufacturer has offered to produce 60.000 Daks and ship them directly to Andretti's customers. If Andretti Company this offer, the facilities that It uses to produce Daks would be idie: however, fixed manufacturing overhead costs would be ed by 75%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only of their present amount. What is Andretti's avoldable ep cost per unit that it should cn hat 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 their present amount. What is Andretti's avoldable cost per unit that it should compare to the price quoted by the outside manufacturer? Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 3 Reg 4A to 4CReg 40 Req 2 Req 5 Assume that Andretti Company has sufficient capacity to produce 90 manufacturing overhead costs. The company could increase its unit sales by 25% above the present 60 it were willing to increase the fixed selling expenses by $80,000. What is the financial advantage (disadvantage) of an additional $80,000 in fixed selling expenses? ,000 Daks each year without any increase in fixed ,000 units each year if Show lessA Financial advantage s 15,000 Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Req 4A to 4C Req 4D Req 5 Assume again that Andretti Company has sufficient capacity to produce 90,000 Daks each year. A customer in a foreign market wants to purchase 20,000 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $1.70 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? (Round your answers to 2 decimal places.) Show less A Break oven price per 23 35 unit Reg -1B 3 Answer is not complete. Complete this question by entering your answers in the tabs below. Req 3 Req 4A to 4C Req 4D Req 5 Req 1A Req 18 Req 2 The company has 1,000 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. cost figure that is relevant for setting a minimum selling price? (Round your answer to 2 decimal What is the unit places.) elevant unit cost 21 80 per unit K Req 2 Req 4A to 4C> Req 1A Req 3 Req 4A to 4CReg 4D Req 5 Req 18 Req 2 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 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, fixed 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. Any losses reductions should be indicated by a minus sign.) 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 avold if it closes the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? Show lessA Forgone contribution margin Total avoidable fixed costs Financial (disadvantage) 588000) 42,000 (426 000) Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Req 4A to 4C Req 4D Req 5 An outside manufacturer has offered to produce 60,000 Daks and ship them directly to Andrett's customers. It Aner Company accepts this offer, the facilities that it uses to produce Daks costs would be reduced by 75% Because the outside manufacturer would pay for all shipping costs, the variable selling would be idle; however, fixed manufacturing overhead avoidable cost per unit that it should compare decimal to the price quoted by the outside manufacturer? (Do not round intermediate calculations. Round your answers to 2 places.) Show lessA dable cost per unit $ 19.20