Chapter it homework Andrem Company has a single product called a Dak. The company normally produces and sells 37,000 Daks each year at a seling price of $5 per unit. The company's unit costs at this level of activity are given below: 3 Direct materials Dit labor rate ufacturing overhead Find facturing overhead Variable selling Fixed wine expenses Total amet pernit 5 7.52 11.00 2.30 8.00 (5696,000 total) 1.70 4.00 ( 5,000 total) SM. 16.66 A number of questions relating to the production and sale of Daks follow. Each question is independent Required: 1- Assume that Andretti Company has sufficient capacity to produce 104.400 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 87.000 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. Autume again that Andre Company has sufficient capacity to produce 104 400 Daks each year A customer in a foreign market wants to purchase 17400 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of 5470 per unit and an additional $19.920 for permits and licenses. The only selling costs that would be associated with the order would be $2.10 per unit Shipping cost. What is the break-even price per unit on this order? 3. The company has 700 Daks on hand that have some irregularities and are therefore considered to be seconds. Due to the irregularities will be impossible to see 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 suppler's plent, Andrett Company is unable to purchase more material for the production of Daks. The strikels 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 plent 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 seling expenses would be reduced by 20% during the two month period a How much total contribution margin Will Andretti forgot it closes the plant for two months How much totalfwed cost will the company evold it 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 87.000 Deks and ship them directly to Andrett's customers. If Andretti Company accents this offer the faciles that uses to produce Doks would be die however, fived 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- thiros of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? Me GE Next Chapter it homework Andrem Company has a single product called a Dak. The company normally produces and sells 37,000 Daks each year at a seling price of $5 per unit. The company's unit costs at this level of activity are given below: 3 Direct materials Dit labor rate ufacturing overhead Find facturing overhead Variable selling Fixed wine expenses Total amet pernit 5 7.52 11.00 2.30 8.00 (5696,000 total) 1.70 4.00 ( 5,000 total) SM. 16.66 A number of questions relating to the production and sale of Daks follow. Each question is independent Required: 1- Assume that Andretti Company has sufficient capacity to produce 104.400 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 87.000 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. Autume again that Andre Company has sufficient capacity to produce 104 400 Daks each year A customer in a foreign market wants to purchase 17400 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of 5470 per unit and an additional $19.920 for permits and licenses. The only selling costs that would be associated with the order would be $2.10 per unit Shipping cost. What is the break-even price per unit on this order? 3. The company has 700 Daks on hand that have some irregularities and are therefore considered to be seconds. Due to the irregularities will be impossible to see 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 suppler's plent, Andrett Company is unable to purchase more material for the production of Daks. The strikels 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 plent 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 seling expenses would be reduced by 20% during the two month period a How much total contribution margin Will Andretti forgot it closes the plant for two months How much totalfwed cost will the company evold it 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 87.000 Deks and ship them directly to Andrett's customers. If Andretti Company accents this offer the faciles that uses to produce Doks would be die however, fived 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- thiros of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? Me GE Next