Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I only need the answer of 1 , 2 ,3 and 4A to 4C Save & Andretti Company has a single product called a Dak.

I only need the answer of 1 , 2 ,3 and 4A to 4C image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Save & 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 $50 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 11.60 3.50 7.00 ($638,080 total) 1.70 6.s8($585,e00 total) $ 38.20 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 121,500 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 900 0 units each year if it were willing to increase the fixed selling expenses by $120,000. What is the financial advantage (disadvantage) of investing an additional $120,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 121,500 Daks each year. A customer in a foreign market wants to purchase 31.500 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $170 per unit and an additional $22,050 for permits and licenses. The only selling costs that would be associated with the order would be $2.40 per unit shipping cost. What is the break-even price per unit on this order? 3. The company has 600 Daks on hand that have some irregularities and are therefore considered to be 'seconds Due to the Prex 40f 7111 Next >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Challenge Of Management Accounting Change

Authors: John Burns, Mahmoud Ezzamel, Robert Scapens

1st Edition

075066004X, 978-0750660044

More Books

Students also viewed these Accounting questions