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I need help with Question 4 and 5 please Andretti Company has a single product called a Dak. The company normally produces and sells 90,000
I need help with Question 4 and 5 please
Andretti Company has a single product called a Dak. The company normally produces and sells 90,000 Daks each year at a selling price of $48 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 $ 7.50 11.00 3.00 7.00 ($630,000 total) 2.70 4.50 ($405,000 total) Total cost per unit $ 35.70 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 suficient capacity to produce 117,000 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 30% above the present 90,000 units each year if it were willing to increase the fixed selling expenses by $120,000. Calculate the incremental net operating income. (Round all dollar amounts to 2 decimal places.) Increased sales in units Contribution margin per unit Incremental contribution margin Less added fixed selling expense Incremental net operating income 27,000 23.80 $ 642,600.00 120,000.00 522,600.00Step by Step Solution
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