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I have the solition to question 1 (second picture) but I need help with question 2, I keep getting stuck on the writing part. Any
I have the solition to question 1 (second picture) but I need help with question 2, I keep getting stuck on the writing part. Any tips or ideas would help. Thanks!
4.50 Andretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The company's unit costs at this level of activity are given below: Direct materials $10.00 Direct labor Variable manufacturing overhead 2.30 Fixed manufacturing overhead 5.00 ($300,000 total) Variable selling expenses Fixed selling expenses 3.50 ($210,000 total) Total cost per unit $26.50 1.20 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 30% 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 60% of their normal level during the two- month period and the fixed selling expenses would be reduced by 20% during the two-month period. Required: 1. Utilizing Excel, create a spreadsheet similar to Exhibit 13-1 on page 576 of the textbook to compare alternatives. Display your results using the total cost approach. Utilize formulas for all calculations and upload to Blackboard as an Excel document. 2. Write a one-page paper to analyze the data you gathered to support your decision of whether the plant should continue operating or close for the two-month period. As part of your analysis please discuss other factors outside of your calculations that could possibly influence your decision 12 Selling Price Varie Expo Direct Materials Director Vatwe Manufacturit Overhead Variale Scilin Contribution Margin Per Unit 10 45 23 12 Normal Production Fixed Manufacturint Dead Fixed Selling Espenes 60,000 300,000 210,000 Analysis Contine Plant Dama 96.000 . 30.000 13:00 Total Sales Varie Expenses Direct Maricriss Direct Labor Variable Manufacturing Overliead Varie Seiling Iponses Total Variable cost Contribution Marin Fired Expenses Fixed Manufacturing Overica Fixed Selling penties Net Income 30,000 13.500 6.900 3. 54,000 42.000 - .54 0 30 DO 35,000 43,000 30 000 2X000 58000 20. 2000 Step by Step Solution
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