Andretti Company has a single product called a Dok The company normally produces and sells 85,000 Daks each year at a selling price of S60 per unit. The company's unit costs at this level of activity are given below Direct materiais Direct labor Variable manufacturing overhead Fixed anfacturing overbead Variable selling expenses Fixed selling expenses Total cost per unit $8.50 2.90 4.00 (5510,000 total) 3.70 3.5 (5397,500 total) $33.60 A number of questions relating to the production and sale of Daks follow. Each question is independent Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 106,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sates by 25% above the present 85,000 units each year if it were Willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disadvantage of investing an additional $150,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andrem Company has sufficient capacity to produce 106 250 Daks each year. A customer in a foreign market wants to purchase 21250 Daks Andretti accepts this order it would have to pay import duties on the Dates of $370 per unit and an additional $17000 for permits and licenses. The only selling costs that would be associated with the order would be $2 20 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 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 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 anternative, Andretts could close its plant down enticely for the two months in the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed seling expenses would be reduced 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 foved 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 85.000 Daks and ship them directly to Andrett's customers. Andrett Company reduced by 30. Because the outside manufacturer would pay for all shipping costs the variable selong expenses would be only two thirds of the present amount What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 106,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 85,000 units each year if it were willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disadvantage) of investing an additional $150,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 106,250 Daks each year. A customer in a foreign market wants to purchase 21,250 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $370 per unit and an additional $17,000 for permits and licenses. The only selling costs that would be associated with the order would be $220 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 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 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 penod. 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 35% 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 marginwil 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 i procuce 85.000 Daku und ship them directly to Andretti's customers. Il Andrett Company accepts this offer the facilities that it uses to produce Daks would be ide; 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 the present amount. What is Andretts 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 Red Reg2 Reg 4 to 4C Reg 40 Reg 5 Red A RIB Assume that Andretti Company has sufficient capacity to produce 106,250 Das each year without any Increase in Mixed manufacturing overhead costs. The company could increase its unitate by above the present asooo units each year in it ware willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disadvantage of investing an additional $150,000 In fixed selling expenses? Show less 1-a. Assume that Andretti Company has sufficient capacity to produce 106,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 85.000 units each year if it were willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disadvantage) of investing an additional $150,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 106,250 Daks each year. A customer in a foreign market wants to purchase 21,250 Daks, if Andretti accepts this order it would have to pay import duties on the Daks of $370 per unit and an additional $17,000 for permits and licenses. The only selling costs that would be associated with the order would be $2.20 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 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, Andrett 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 35% 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 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? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 85.000 Daks and ship them directly to Andretti's customers. If Andrett 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 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 2 Reg 2 R10 Reg 4 to 4C Re 40 Reg 5 Reg 1A Assume that Andrett company has sufficient capacity to produce 106.250 Daks each year without any increase in fixed manufacturing overhead costs The company could increase in sales by 25% above the procent 5,000 units each year it were willing to increase the fied calling expenses by $150,000. Would the additional investment be justified Yos Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 106.250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 85.000 units each year if it were Willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disadvantage) of investing an additional $150,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 106.250 Daks each year. A customer in a foreign market wants to purchase 21.250 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional 517000 for permits and licenses. The only selling costs that would be associated with the order would be $220 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 irregularities and are therefore considered to be 'seconds Due to the tregularities, 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 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 35% 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 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 85,000 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? Complete this question by entering your answers in the tabs below. Reg Reg Reg A to 40 RG2 Reg 5 Red A Hee 10 Assume again that Andretti Company has sufficient capacity to produce 106,250 Daks each year. A customer in a foreign market wants to purchase 21.250 Daks. If Andreu accept this order it would have to pay Import duties on the Daks of $3.70 per unit and an additional $17,000 for permits and licenses. The only selling costs that would be associated with the order would be $2.20 per unit shipping cost. What is the break even price per unit on this order (Round your answers to decimal Show less Brownpriceperunt equired: a. Assume that Andretti Company has sufficient capacity to produce 106,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 85,000 units each year if it were willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disadvantage) of investing an additional $150,000 in fixed selling expenses? b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 106,250 Daks each year. A customer in a foreign market wwants to purchase 21.250 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $370 per unit and an additional $17.000 for permits and licenses. The only selling costs that would be associated with the order would be $2.20 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 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 seling price? 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 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 dosed, fived manufacturing overhead costs would continue at 35% 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 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? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 85.000 Daks and ship them directly to Andretti's customers. If Andretti Company accepts this offer the facilities that it uses to produce Dakt would be idis, 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 Andrettis 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. Req1A Reg 10 Re Reg Reg 4 to 40 4D Rad The company has 500 Daku on hand that have some regularities and are therefore considered sobomacondon to the IrregularitiesIt will be impossible to all these units at the normal orice through regular distribution channelWhat is the olt cont figure that is relevant for setting a minimum selling price on your wer to demam Relevant to 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 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 35% 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 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? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 85.000 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? Complete this question by entering your answers in the tabs below. Reg 1B Reg 2 Req3 Req IA Red 4 to 40 Reg 40 Reg 5 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 35% 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 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 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? Show less Forgone contribution margin Total avoidable fixed costs Financial advantage (disadvantage) Required: 1-a Assume that Andretti Company has sufficient capacity to produce 106,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 85,000 units each year if it were willing to increase the fixed selling expenses by $150,000 What is the financial advantage (disadvantage) of investing an additional $150,000 in fixed selling expenses? 1-6. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 106,250 Daks each year. A customer in a foreign market wants to purchase 21.250 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $370 per unit and an additional $17000 for permits and licenses. The only selling costs that would be associated with the order would be $2.20 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 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 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 35% of their normal level during the two-month period and the fixed selling expenses would be 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? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 85.000 Daks and ship them directly to Andrett's customers. It Andrett Company accepts this offer the facilities that it uses to produce Daks would be idiehowever, 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 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 Reale Reg 2 Reg 3 Reg 4A to 4C Re:D Regs 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, fiuced manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling experists would be reduced by 20% during the two-month period. Should Andretti close the plant for two months? Show less Yes 2. Asume ayant de compatiy nos sumcen Capacny w pruule 10,250 KS each year customer widtegn diket wants to purchase 21.250 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $370 per unit and an additional $17,000 for permits and licenses. The only selling costs that would be associated with the order would be $2.20 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 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, Andrett 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 35% 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 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? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 85,000 Daks and ship them directly to Andretti's customers. If Andrett 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? Complete this question by entering your answers in the tabs below. Rego Reg 2 Red 4 to 40 Rod 40 Reg 5 Ne 1A Reg 10 An outside manufacturer has offered to produce 85,000 Date and ship them directly to Andretti's customers. If Andretti Company accepts this offer the facilities that it uses to produce Daks would be die however, fixed manufacturing overhead costs would be reduced by 10%. Because the outside manufacturer would pay for shipping costs, the variable telling expenses would be only two-thirds of their present amount. What is Andretti oldable cost per unit that it should compare to the price quoted by the outside manufacturer? (Do not round Intermediate calculations. Round your answer to max places) Show less Avoidable cost per un