Assume that Andretti Company has sufficient capacity to produce 121,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 90,000 units each year if it were willing to increase the fixed selling expenses by $110,000. Would the additional investment be justified? Andrett Company has a single product caled a Dak. The compony normally produces and sels 90,000 Daks each year at a sellng price of $58 per unit. The company/s unt costs it this lever of activity are given below A number of questions relating to the production and sole of Daks follow, Each question is independent Required: 14. Assume that Andrett Company has sufficient capacity to produce 121,500 Daks each year without any increase in fxed manufocturing overhead costs. The company could increase its unit sales by 35% bbove the present 90,000 units each yoar if I were wiling to increase the fixed selling expenses by $10,000. What is the financial edvantage folsadvantagel of investing an additional $110,000 in fixed selling expenses? 16. Would the addicional imvestment be justdied? 2. Assurne again that Andretti Company has sufficiont capacity to produce 121,500 Doks eoch year. A customer in a foreign market wants to purchase 3.500 Doks, ir Andreeti accepts this order it would have to poy import dutes on the Oaks of $1.70 per unit and an addational $18,900 for permits and licenses. The only selling costs that would be associeted with the ordee would be $1.40 per unit shipping cost What is the break-even price per unit on this order? 3. The compary has 600 Daks on hand that have scme irregularities and ere therefore considered to be "seconds."Due to the irtegularities, it will be impossole to set these units at the normal price through regular distribution channets. What is the unit cost figure that is relevant for setting a minimum selling price? 4. Due to a strike in its suppler's plant, Andretsi Company is unoble to purchase more material for the production of Daks. The strike is expected to lost for two months. Andrerti Company has onough material on hand to operate of 25% of normal levels for the two-month period. As an alternative, Andreti could dose its plant down entirely for the fwo months. If the plamt were ciosed, fixed manufacturing overhead costs would conthue at 35% of their normal level during the two-month period and the fued seling expenses would be reduced by 20% during the two-month period. a. How much total contribution margin will Andrets forgo in it closes the plant for two months? b. How much total fixed cost wil the company avold if it closes the plant for two months? c. What is the financial advantege (disedvantege) of closing the plant for the two-month period? d. Shovid Andretti close the plant for two monthe? 5. An outside manufacturer has offered to produce 90.000 Daks and ship them directily to Andretis customers. M Andrets Company accepts this offer, the facities that it uses to produce Daks would be idie, howevec, fixed manufacturing overhead costs would be reduced by 30s. Because the outside manufacturer would pay for all shipping costs, the variable seling expenses would be only two-thirds of their presem amount. What is Andietr's avoidable cost per unit that it should compare to the price quoted by the outside manufecturer? Complete this question by entering your answers in the tabs below. Req 18 Req 2 Rea 4A to 4C Req 40 Req 5 Assume that Andretti Company has sufficient capacity to produce 121,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 90,000 units each year if it were willing to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage) of investing an additional $110,000 in fixed selling expenses? Show less a Assume again that Andretti Company has sufficient capacity to produce 121,500 Daks each year. A customer in a foreign market wants to purchase 31,500 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $1.70 per unit and an additional $18,900 for permits and licenses. The only selling costs that would be associated with the order would be $1.40 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places.) Show less: Break-oven price per unit 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 or 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 a The company has 600 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 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 thaterial 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. Should Andretti close the plant for two months? Show lessa An outside manufacturer has offered to produce 90,000 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 Andrett'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 places.) Show less A Avoidable cost per unit