Andreu Company has a single product called a Dak. The company normally produces and sells 89,000 Daks each year at a selling price of $62 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $9.50 9.ee 2.70 5.00 (5445,000 total) 2.70 4.00 (5356,00 total) $32.90 A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1-0. Assume that Andrett Company has sufficient capacity to produce 120,150 Doks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 89.000 units each year if it were willing to increase the foxed 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 Andrett Company has sufficient capacity to produce 120,150 Doks each year. A customer in a foreign market wants to purchase 31,150 Doks If Andretti accepts this order it would have to pay import duties on the Daks of $2.70 per unit and an additional $24.920 for permits and licenses. The only selling costs that would be associated with the order would be $1.30 per unit Shipping cost. What is the break-even price per unit on this order? 3. The company has 800 Daks on hand that have some rregularities and are therefore considered to be 'seconds. Due to the Irregularities, it will be impossible to sell these untts 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 suppliers piont, Andretti Company is unable to purchase more material for the production of Dokt: The strike 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 fived manufacturing overhead costs would continue at 40% of their normal level during the two-month period and the fixed selling expenses would be mantin 23 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. Andretu Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andrett could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 40% 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 of 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 89,000 Daks and ship them directly to Andretu's customers. If Andretu 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. Req1A Reg 10 Reg 2 Req3 Req 4A to 4C Reg 40 Regs Assume that Andretti Company has sufficient capacity to produce 120,150 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 89.000 units each year i 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? Show less Req13 > a. How much total contribution margin Will Andretti forgo if it closes the plant for two months? b. How much total foxed 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 89.000 Daks and ship them directly to Andretti's customers. If Andretu 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. Req IA Reg 13 Reg 2 Red 3 Reg 4 to 4C RAG 4D Reg 5 Assume again that Andretti Company has sufficient capacity to produce 120,150 Dakes each year. A customer in a foreign market wants to purchase 31,150 Dals. If Andretti accepts this order it would have to pay import duties on the Dals of $2.70 per unit and an additional $24.920 for permits and licenses. The only selling costs that would be associated with the order would be $1.30 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places.) Show less Breskoven price per unit reduced by 20% during the two month period. a. How much total contribution margin Will Andrem 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 89,000 Daks and ship them directly to Andretu'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 Andrett's avoidable cost per unit that it should compare to the price quoted by the outude manufacturer? Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 Reg 2 Reg 3 Reg 4A to 4C Reg 4D Reg 5 The company has 800 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.) Relevant unit cost per unit depus UNS Ullet, le dues uidt i USES I provuce UdKS WOUlu Devue, nowever, Xulidu Guiy uvedu CUSS WUUU DU 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 avoldable 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 Reg 1B Req 2 Req3 Req 4A to 4C Req 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 leyes 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 40% 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 foxed costs Financial advantage (disadvantage) d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 89,000 Daks and ship them directly to Andretur'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 vartable 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. Req 1A Reg 18 Reg 2 Reg 3 Req 4A to 4C Reg 4D Reg 5 An outside manufacturer has offered to produce 89.000 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 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 found intermediate calculations. Round your answers to 2 decimal places.) Show less Avola cost per un irregularities, I Will be impossible to sell these units at the normal price througn regular distributon channels, what is the unit COSE 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 15 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 40% 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 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 89.000 Daks and ship them directly to Andretti's customers. If Andrtti 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 Andretu'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 Reg 18 Reg 2 Rag 2 Req 4A to 40 Reg 4D Reg 5 Assume that Andretti Company has sufficient capacity to produce 120.130 Daks each year without any increase in fired manufacturing overhead costs. The company could increase its unit sales by 35% above the present 89.000 units each year it it were willing to increase the forced selling expenses by $150,000. What is the financial advantage (disadvantage of investing an additional $150.000 in Fixed selling expenses? Show less He 18 > 3 irregularities, it will be impossible to see these units at the normal price througn regular GISTIDUDON channers, wat is the unit COSE figure that is relevant for setting a minimum selling price? 4. Due to a strike in its suppller's plant, Andretti Company is unable to purchase more material for the production of Daks. The strike 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 40% 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 Andretu 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 Andretu close the plant for two months? 5. An outside manufacturer has offered to produce 89,000 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, fxed 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? nces Complete this question by entering your answers in the tabs below. Reg 1A Raq 18 Reg 2 Rag3 Reg 4 to 4 Req 40 Reg 5 Assume again that Andretti Company has sufficient capacity to produce 120.150 Daks each year. A customer in a foreign market wants to purchase 31.150 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $2.70 per unit and an additional $24.920 for permits and licenses. The only selling costs that would be associated with the order would be $1.30 per unit shipping cost. What is the brealeven price per unit on this order? (Round your answers to a decimal places.) Show less Brayer price unt 3 Book 3. The company has 800 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 40% 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 89.000 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? Srint erences Complete this question by entering your answers in the tabs below. Reg 14 Req 18 Ra 2 Il Rega Reg 4A to 40 Reg 4D Regs The company has 800 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 cont figure that is relevant for setting a minimum selling price? (Round your answer to a decimal placen! Rent ! per unit Shop Do Homework - Ho... Chapter 13(2) 3 accepts this offer, the facilities that it uses to produce Daks would be idle, however, foved 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 Andretu's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? 10 point Complete this question by entering your answers in the tabs below. eBook Print Reg 1A Reg 18 Reg 2 Reg 3 Req 4A to 4C Req 4D Reg 5 References 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 40% of their normal level during the two month period and the foced 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 faced cost will the company avoid if it closes the plant for two months e. What is the financial advantage (disadvantage) of closing the plant for the two-month period? Show less W Forgone contribution margin Total avoidable fred costs Financial advantage disadvantage 3 10 points expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-mon period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, foxed manufacturin overhead costs would continue at 40% 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 Andrett forgo if it closes the plant for two months? b. How much total fixed cost will the company avoid if closes the plant for two months? 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 89,000 Daks and ship them directly to Andrett'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? eBook Print References Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2 Reg 3 Reg 4A to 40 Reg 4D Reg 5 An outside manufacturer has offered to produce 89.000 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 costa, 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 answers to 2 decimal place.) Show less Avadable cost per unit