Andretti Company has a single product called a Dak. The company jowna. y prodgces and sellit B6.000 Daks each year at a selling price of $56 per unit The company's unit costs at this evel of actuyty ale givenfrefow: A number of questions relating to the production and sale of Daks follow Hact question is ndependent. Required: 1-a. Assume that Andretti Company has sufficient capacity to produceforsoo Bass each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sale by 25 , above the present 86,000 units each year if it were willing to increase the fixed selling expenses by $110,000 What tis the frianclal a dyontage (disadvantage) of investing an additional $110.000 in fixed selling expenses? 1.b. Would the additional investment be justified? 2. Assume again that Andrett Company has sufficient copacty to poduce 107 soo Baks each year. A customer in a foreign market Wants to purchase 21,500 Doks. If Andretti accepts this order it would fave to pay lmpont duties on the Daks of $370 per unit and an additional $19,350 for permits and licenses. The only seling costs mat would be assoclated with the order would be $1.80 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 liegularities and are weyefore cansidered to be "seconds " Due to the irregulatities, it will be impowsibe to sell these units at the noirmal price thoughregofar chstribution channels. What is the unit cost tigure that is relevant for setting a minimum selling pice? 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 materral on hand to operate ai 25% of normal levels for the two-month period. As an alternative. Andretti could close its plant down entifely for the two montss, if the plant were closed, fived manuficturing overhead costs would continue at 30% of their nomal level during the two-month period and the fined selling expenses would be reduced by 205 during the two-month pefiod. a. How much total contribution margin will Andieti forgo if is closes the plant for two months? b. How much fotal fixed cost will the company avoid if it closes the plant for two months? c. What is the financiat advantage (disacvantage) of closing the plant for the two-month penod?) d. Should Andretti ciose the plant for two months? 5. An outside manufoctures has offered to produce 86,000 Daks and ship them directly to Andrette customess it Andrett Company accepts this offer, the facilites that it uses to produce Dabs would be idle, howeves. fired mancficturing over head costs would be reduced by 30%. Because the outside manufacturer woild pay for all shipping costs, the vaiflatie se fing experises would be only twothirds of their present amount. What is Andrettis ovoidable cost per unit that it should compare to the price quoted by the outside manufacticer? reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be c thirds of their present amount. What is Andretti's avoidable cost per unit that if should compare to the price quoted by the outs manufacturer? Complete this question by entering your answers in the tabs below. Assume that Andretti Company has sufficient capacity to produce 107,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 86,000 units each year if it were willing to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage) of Investing an additional $110,000 in fixed selling expenses? 5. An outside manufacturer has offered to produce 86,000 Daks and ship them directly to Andretti's customers. If Andretti Compar accepts this offer, the facilities that it uses to produce Daks would be lole, 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 t 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. Assume that Andretti Company has sufficient capadity to produce 107,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 86,000 units each year if it were willing to increase the fixed selling expenses by $110,000. Would the additional investment be justified? 5. An outside manufacturer has offered to produce 86.000 Daks and ship them directly to Andrett's customers. If Andretti Comp accepts this offer, the facilities that it uses to produce Daks would be ldle however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping cosis, the variable selling expenses would be only thirds of their present amount. What is Andrettis avoidable cost per unit that it should compare to the price quoted by the outsid manufacturer? Complete this question by entering your arhwers in the tabs below. 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.) Complete this question by entering your answers in the tabs below. 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 altemative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing 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. (Round number of units produced to the nearest whole number. Round your intermediate calculations and final answers to 2 decimal places. Any fosses/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 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? Complete this question by entering your answers in the tabs below. 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 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. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 86,000 paks and ship them direatly to Andrett's customers. If Andretti Cor accepts this offer, the facilities that it uses to produce Daks would be lille. ho wever, fixed manufacturing overhead costs would reduced by 30%. Because the outside manufacturer would pay for all shipping cosis, the variable selling expenses would be or manufacturer? Complete this question by entering your answers in the tabs below. An outside manufacturer has offered to produce 86,000 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? (Do not round intermediate calculatians. Round your answers to 2 declmal