Question
Andretti Company produces and sells a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price
Andretti Company produces and sells 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 companys unit costs at this level of activity are given below:
Direct materials | $10.00 |
|
Direct manufacturing labor | 4.50 |
|
Variable manufacturing overhead | 2.30 |
|
Fixed manufacturing overhead | 5.00 | ($300,000 total) |
Variable selling expenses | 1.20 |
|
Fixed selling expenses | 3.50 | ($210,000 total) |
Total cost per unit | $26.50 |
|
A number of questions related to the production and sale of Daks follow. Each question is independent.
Requirements:
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