Andretti Company has a single product called a Dak. The company normally produces and sells 87,000 Daks each year at a selling price of $59 per unit. The company's unit costs at this level of activity follow: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses $19.00 13,50 11.30 5.00 3.90 3.50 $435,000 total $304,500 total Total cost per unit $56.20 A number of questions relating to the production and sale of Daks follow. Consider each question separately Required: 1. Assume that Andretti Company has sufficient capacity to produce 150,000 Daks every year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the present 87,000 units each year if it were willing to increase the fixed selling expenses by $30,625, a. Calculate the incremental net operating income. (Do not round intermediate calculations.) Incremental net operating income $ 212 975 b. Would the increased fixed expenses be justifie Yes No 5. An outside manufacturer has offered to produce Daks for Andretti Company and to 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 overhead costs would be reduced by 75% of their present level. Since the outside manufacturer would pay all the costs of shipping, the variable selling costs would be only two- thirds of their present amount. Compute the unit cost figure relevant for comparison to whatever quoted price is received from the outside manufacturer. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Total avoidable unit cost