Andretts 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 look 1 20 rences Direet materiais $ 10 00 Direct labor 4 50 Variable manufacturing overhead 2 30 Fixed manufacturing overhead 5 00 (5300 000 total) Variable selling expenses Tixed selling expenses 3 50 $210,000 total) Total cost per unit $26 50 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 90,000 Daks each year without any increase in fixed manufacturing overhead costs The company could increase its unit sales by 25 above the present 60,000 units each year if it were willing to increase the fixed selling expenses by $80,000 What is the financial advantage (disadvantage) of investing an additionat $80,000 in fixed selling expenses 1 b Would the additional investment be justified 2 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 $170 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 3 The company has 1000 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 Andrett 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, fed 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 a How much total contribution margin Will Andretti forgo if it closes the plant for two months 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 Check my work W LUCID HIALUS Pen wy DOUW WIE IS UILIIGUVAI Roye quibuvai LU HIVYOTION $80,000 in fixed selling expenses 1 b Would the additional Investment be justified 2 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 $170 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 3 The company has 1000 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 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 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 60,000 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 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 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 Complete this question by entering your answers in the tabs below Reg 1A Reg 1B Reg 2 Reg 3 Reg 4A to 4C 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 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 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 5 An outside manufacturer has offered to produce 60,000 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 75 Because the outside manufacturer would pay for all shipping costs, the variable seling 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 Req 1A Req 18 Reg 2 Reg 3 Req 4A to 4C Req 4D 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 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, Should Andretti close the plant for two months Show less OYes ON d Should Andretti close the plant for two months 5 An outside manufacturer has offered to produce 60,000 Daks and ship them directly to Andrett'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 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 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 5 Req3 Reg 4A to 4C Reg 4D Reg 1A Reg 2 Reg 1B An outside manufacturer has offered to produce 60,000 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 die 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 avoidable cost per unit that it should compare to the price quoted by the outside manufacturer (Do not round Intermediate calculations Round your answer to 2 decimal places ) Show less Avoidable cost per unit Red

Question

Andretts 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  look 1 20 rences Direet materiais $ 10 00 Direct labor 4 50 Variable manufacturing overhead 2 30 Fixed manufacturing overhead 5 00 (5300 000 total) Variable selling expenses Tixed selling expenses 3 50 $210,000 total) Total cost per unit $26 50 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 90,000 Daks each year without any increase in fixed manufacturing overhead costs  The company could increase its unit sales by 25  above the present 60,000 units each year if it were willing to increase the fixed selling expenses by $80,000  What is the financial advantage (disadvantage) of investing an additionat $80,000 in fixed selling expenses  1 b  Would the additional investment be justified  2  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 $170 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  3  The company has 1000 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  Andrett 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, fed 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  a  How much total contribution margin Will Andretti forgo if it closes the plant for two months    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  Check my work W LUCID HIALUS Pen wy DOUW  WIE IS UILIIGUVAI Roye quibuvai LU HIVYOTION $80,000 in fixed selling expenses  1 b  Would the additional Investment be justified  2  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 $170 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  3  The company has 1000 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 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  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 60,000 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 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 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  Complete this question by entering your answers in the tabs below  Reg 1A Reg 1B Reg 2 Reg 3 Reg 4A to 4C 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 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 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 5  An outside manufacturer has offered to produce 60,000 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 75   Because the outside manufacturer would pay for all shipping costs, the variable seling 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  Req 1A Req 18 Reg 2 Reg 3 Req 4A to 4C Req 4D 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 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, Should Andretti close the plant for two months  Show less OYes ON d  Should Andretti close the plant for two months  5  An outside manufacturer has offered to produce 60,000 Daks and ship them directly to Andrett'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 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 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 5 Req3 Reg 4A to 4C Reg 4D Reg 1A Reg 2 Reg 1B An outside manufacturer has offered to produce 60,000 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 die  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 avoidable cost per unit that it should compare to the price quoted by the outside manufacturer  (Do not round Intermediate calculations  Round your answer to 2 decimal places ) Show less Avoidable cost per unit Red

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Andretts 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

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