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Andretti Company has a single product called a Dak. The company normally produces and sells 87.000 Daks each year at a sellin 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 $ 8.50 9.00 2.90 5.00 (5435,000 total) 3.70 3.50 (5384,500 total) $ 32.60 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 113,100 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 30% above the present 87,000 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? 1-b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 113,100 Daks each year. A customer in a foreign market wants to purchase 26,100 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $18.270 for permits and licenses. The only selling costs that would be associated with the order would be $1.60 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 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 leve 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 30% 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 87,000 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? materials labor le manufacturing overhead manufacturing overhead le selling expenses selling expenses cost per unit 9.00 2.90 5.20 (5435,000 total) 3.70 3.50 (5364,500 total) $ 32.60 ber of questions relating to the production and sale of Daks follow. Each question is independent. red: sume that Andretti Company has sufficient capacity to produce 113,100 Daks each year without any increase in fixe Facturing overhead costs. The company could increase its unit sales by 30% above the present 87.000 units each ye to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage) of investing an a 500 in fixed selling expenses? Jould the additional investment be justified? sume again that Andretti Company has sufficient capacity to produce 113,100 Daks each year. A customer in a foreign to purchase 26,100 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per tional $18,270 for permits and licenses. The only selling costs that would be associated with the order would be $1.60 ping cost. What is the break-even price per unit on this order? me company has 800 Daks on hand that have some irregularities and are therefore considered to be "seconds. Due to gularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the u re that is relevant for setting a minimum selling price? ue to a strike in its supplier's plant, Andretti Company is unable to purchase more material for the production of Daks. ected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the lod. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed man arhead costs would continue at 30% of their normal level during the two-month period and the fixed selling expenses wo Buced by 20% during the two-month period. How much total contribution margin will Andretti forgo if it closes the plant for two months? How much total foxed cost will the company avoid if it closes the plant for two months? What is the financial advantage (disadvantage) of closing the plant for the two-month period? Should Andretti close the plant for two months? An outside manufacturer has offered to produce 87,000 Daks and ship them directly to Andretti's customers. If Andretti Ce ccepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs wou educed by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be irds of their present amount What is Andretti's avoidable cost per unit that it should compare to the price quoted by the ou manufacturer? Complete this question by entering your answers in the tabs below. Reg 1A Reg 10 Req2 Reg 3 Req 4A to 4C Req 40 Reg 5 Assume that Andretti Company has sufficient capacity to produce 113,100 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 30% above the present 87,000 units each year if it were willing to increase the foed selling expenses by $110,000. What is the financial advantage (disadvantage) of investing an additional $110,000 in forced selling expenses? Show less $ 1202.400 Reg 10 > t material t labor ble manufacturing overhead manufacturing overhead ble selling expenses selling expenses 1 cost per unit 2.90 5.0 (5435,000 total) 3.70 3.5 (5364,50e total) $32.60 ber of questions relating to the production and sale of Daks follow. Each question is independent fired: ssume that Andretti Company has sufficient capacity to produce 113,100 Daks each year without any increase in fixed facturing overhead costs. The company could increase its unit sales by 30% above the present 87.000 units each yea 9 to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage) of investing an a 000 in fixed selling expenses? Nould the additional investment be justified? sume again that Andretti Company has sufficient capacity to produce 113,100 Daks each year. A customer in a foreign as to purchase 26,100 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per ational $18.270 for permits and licenses. The only selling costs that would be associated with the order would be $1.60 ping cost. What is the break-even price per unit on this order? the company has 800 Daks on hand that have some irregularities and are therefore considered to be "seconds. Due to gularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the u are that is relevant for setting a minimum selling price? Due to a strike in its supplier's plant, Andretti Company is unable to purchase more material for the production of Daks. bected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the miod. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed mar erhead costs would continue at 30% of their normal level during the two-month period and the fixed selling expenses we Suced by 20% during the two-month period. How much total contribution margin Will Andretti forgo if it closes the plant for two months? How much total foxed cost will the company avoid if it closes the plant for two months? What is the financial advantage (disadvantage) of closing the plant for the two-month period? Should Andretti close the plant for two months? An outside manufacturer has offered to produce 87,000 Daks and ship them directly to Andretti's customers. If Andretti ccepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs wo educed by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would b hirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the manufacturer? Complete this question by entering your answers in the tabs below. Req 1A Reg 18 Reg 2 Reg 3 Req 4A to 4C Req 40 Reg 5 Assume again that Andretti Company has sufficient capacity to produce 113,100 Daks each year. A customer in a foreign market wants to purchase 26,100 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $18,270 for permits and licenses. The only selling costs that would be associated with the order would be $1.60 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 even price per un drer Company has & ice of $62 per unit. The company's unit costs $8.50 Direct materials Direct labor Varile manufacturing overhead bed facturing overhead Variable selling expenses Find selling expenses Total cost per unit 2.90 5.00 (5435,000 total) 3.29 3.50 (5364,500 total) $32.60 number of questions relating to the production and sale of Daks follow. Each question is independent equired: Assume that Andretti Company has sufficient capacity to produce 113,100 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 30% above the present 87.000 units each year if it willing to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage) of investing an addition 110,000 in foed selling expenses? b. Would the additional investment be justified? Assume again that Andretti Company has sufficient capacity to produce 113,100 Daks each year. A customer in a foreign mark wants to purchase 26,100 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit an dditional $18.270 for permits and licenses. The only selling costs that would be associated with the order would be $1.60 per un hipping cost. What is the break-even price per unit on this order? The company has 800 Daks on hand that have some irregularities and are therefore considered to be 'seconds. Due to the rregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit ca igure that is relevant for setting a minimum selling price? Due to a strike in its supplier's plant, Andretti Company is unable to purchase more material for the production of Daks. Thes expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two Seriod. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufac overhead costs would continue at 30% of their normal level during the two-month period and the fixed selling expenses would educed by 20% during the two-month period. How much total contribution margin Will Andretti forgo if it closes the plant for two months? How much total fixed cost will the company avoid if 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 Daks and ship them directly to Andretti's customers. If Andretti Com accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be or thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outsi manufacturer? Complete this question by entering your answers in the tabs below. Red 1A Reg 16 Reg 2 Req3 Req 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 deqmal places.) Relevant un cost per unit manufacturing ble selling expenses selling expenses cost per unit 3.50 (5364,500 total) $32.60 aber of questions relating to the production and sale of Daks follow. Each question is independent. red: Esume that Andretti Company has sufficient capacity to produce 113,100 Daks each year without any increase in fie facturing overhead costs. The company could increase its unit sales by 30% above the present 87,000 units each to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage) of investing am 500 in foed selling expenses? Would the additional investment be justified? sume again that Andretti Company has sufficient capacity to produce 113,100 Daks each year. A customer in a forei s to purchase 26,100 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 pe tional $18.270 for permits and licenses. The only selling costs that would be associated with the order would be $1. ping cost. What is the break-even price per unit on this order? he company has 800 Daks on hand that have some irregularities and are therefore considered to be 'seconds. Due ularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the re that is relevant for setting a minimum selling price? ue to a strike in its supplier's plant, Andretti Company is unable to purchase more material for the production of Daks ected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for iod. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed erhead costs would continue at 30% of their normal level during the two-month period and the fixed selling expenses Buced by 20% during the two-month period. How much total contribution marginwill Andretti forgo if it closes the plant for two months? How much total fixed cost will the company avoid if it closes the plant for two months? What is the financial advantage (disadvantage) of closing the plant for the two-month period? Should Andretti close the plant for two months? An outside manufacturer has offered to produce 87,000 Daks and ship them directly to Andretti's customers. If Andrett ccepts this offer, the facilities that it uses to produce Daks would be idle, however, fixed manufacturing overhead costs educed by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would mirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the manufacturer? Complete this question by entering your answers in the tabs below. Reg LA Reg 15 Reg 2 Req3 Req 4 to 40 Req 40 Reqs 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 dose its plant down entirely for the two months. If the plant were dosed, fixed manufacturing overhead costs would continue at 30% 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 doses the plant for two months? b. How much total fixed cost will the company avoid if it doses the plant for two months? c. What is the finandal advantage (disadvantage) of dosing the plant for the two-month period? Show less Forgone coon margin Total widable tacos Francia antage overtage) 41.601 ndre Compo ice of $62 per unit. The company Direct materials Direct labor Variable manufacturing overhead xed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $8.50 9.00 2.99 5.00 (5435,000 total) 3.70 3.50 (5364,500 total) $32.60 number of questions relating to the production and sale of Daks follow. Each question is independent Required: Assume that Andretti Company has sufficient capacity to produce 113,100 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 30% above the present 87,000 units each year willing to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage) of investing an add 5110.000 in foed selling expenses? 1-b. Would the additional Investment be justified? Assume again that Andretti Company has sufficient capacity to produce 113,100 Daks each year. A customer in a foreign m wants to purchase 26,100 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unr additional $18.270 for permits and licenses. The only selling costs that would be associated with the order would be $1.60 pe shipping cost What is the break-even price per unit on this order? 3. The company has 800 Daks on hand that have some irregularities and are therefore considered to be 'seconds. Due to t irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the uni 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. Th expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manu overhead costs would continue at 30% of their normal level during the two-month period and the fixed selling expenses wOL 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 87,000 Daks and ship them directly to Andretti's customers. If Andretti C accepts this offer, the facilities that it uses to produce Doks would be idle; however, fixed manufacturing overhead costs WOL reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the o manufacturer? Complete this question by entering your answers in the tabs below. Reg 14 Req 1B Reg 2 Reg 3 Req 4A to 4C Req 4D Reqs 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 dose its plant down entirely for the two months. If the plant were dosed, fixed manufacturing overhead costs would continue at 30% 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 Yes ONO Reg 4A to 4C Req5 > drett Company ice of $62 per unit. The company's unit cos 2.90 5.00 (5435,000 total) Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit 3.50 (5364,500 total) number of questions relating to the production and sale of Daks follow. Each question is independent equired: Assume that Andretti Company has sufficient capacity to produce 113,100 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 30% above the present 87.000 units each year if willing to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage of investing an addit 110,000 in fed selling expenses? -b Would the additional Investment be justified? Assume again that Andretti Company has sufficient capacity to produce 113,100 Daks each year. A customer in a foreign man wants to purchase 26,100 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit additional $18.270 for permits and licenses. The only selling costs that would be associated with the order would be $1.60 per shipping cost. What is the break-even price per unit on this order? 3. The company has 800 Daks on hand that have some irregularities and are therefore considered to be "seconds. Due to the rregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit igure that is relevant for setting a minimum selling price? . Due to a strike in its supplier's plant, Andretti Company is unable to purchase more material for the production of Daks. The expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the tv period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufe overhead costs would continue at 30% of their normal level during the two-month period and the fixed selling expenses would reduced by 20% during the two-month period. 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? 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 Daks and ship them directly to Andretti's customers. If Andretti Cor accepts this offer, the facilities that it uses to produce Daks would be idle, however, fixed manufacturing overhead costs woul reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the out manufacturer? Complete this question by entering your answers in the tabs below. Req1A Reg 1B Reg 2 Reg 3 Req 4A to 4C Reg 40 Req 5 An outside manufacturer has offered to produce 87.000 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, foxed 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 round intermediate calculations. Round your answers to 2 decimal places.) Available to per un Show less