Ovation Company has a single product called a Bit. The company normally produces and sells 52,800 Bits each year at a selling price of $42 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses $12.00 6.00 2.10 3.30 ($174,240 total) 5.10 3.60 ($190,080 total) Total cost per unit $32.10 A number of questions relating to the production and sale of Bits follow. Each question is independent Required: 1. Assume that Ovation Company has sufficient capacity to produce 79,200 Bits each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the current 52,800 units each year if it were willing to increase the fixed selling expenses by $90,000 a. Calculate the incremental net operating income Incremental operating income b. Would the increased fixed selling expenses be justified? O Yes No 2. Assume again that Ovation Company has sufficient capacity to produce 79,200 Bits each year. A customer in a foreign market wants to purchase 13,200 Bits. Import duties on the Bits would be $1.70 per unit, and costs for permits and licences would be $5,940. 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 decimal places.) Break-even price per unit