Dvation Company has a single product called a Bit. The company normally produces and sells 36,000 Bits each year at a selling price f $35 per unit. The company's unit costs at this level of activity are given belowi A number of questions relating to the production and sale of Bits follow Each question is independent. Required. 1. Assume that Ovation Company has sutficient capacity to produce 54,000 Bits each year without any increase in fixed manufacturing averhead costs. The company could increase its sales by 25% above the current 36.000 units each year if it were willing to increase the fixed seting expenses by b. Would the increased fored seling expenses be justified? 2. Assume again that Ovation Company has sufficient capacity to produce 54,000 Bits each year. A customer in a foreign market wants to purchase 9,000 Bits. Import duties on the Bits would be $1,70 per unit, and costs for permits and licences would be $4,050. Both import duties and permits and licenses will be paid by Ovation. The only selling costs that would be associated with the order are $3.60 per unit shipping cost Compute the per unit break-even price on this order. (Do not round your intermediate calculations. Round your answer to 2 decimol places.) 3. The company has 1,000 Bits on hand that have some irregularities and are therefore considered to be "seconds." Due to the. inegularities, it wir be impossible to sell these units at the normal price through regular distribution channels. What unit cost figure is relevant for setting a minimum seling ptice? (Round your answer to 2 decimal ploces.) 4. Due to a strike in its supplier's plant. Ovation Company is unable to purchase more material for the production of Bits. The strike is expected to last for two months. Ovation Company has enough materiation hand to operate at 30% of normal levels for the two-month overtiead costs would continue at 60%-of their normal level during the the two months. If the plant were closed, fixed manufacturing reduced by 20\%s. What would be the impact on profits of closing the plant-month period and the fixed selling expenses would be motround your intermediate calculotions.) 4. Due to a strike in its supplier's plant, Ovation Company is unable to purchase more material for the production of Bits. The strike is expected to last for two months. Ovation Company has enough material on hand to operate at 30% of normal levels for the two-month period. As an alternative, Ovation 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 petiod and the fixed selling expenses would be volue. Do not round your intermediate colculations.) 5. An outside manufacturer has offered to produce Bits and ship them difectly to Ovation's customers. If Ovation Company accepts this ofter, the focilites that it uses to produce Bits would be idle, however, fixed manufactuting overhead costs would be reduced by current amount Compute the unit cost thot is relevant for comparison to the price seling expenses would be only two-thirds of their Your intermedinte colculotions. Round vour answer to 2 decimal places.) ptice quoted by the outside manufacturer. (Do not round