Ovation Company has a single product called a Bit. The company normally produces and sells 62,400 Bits each year at a selling price of $46 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 Total cost per unit $10.80 7.20 3.30 4.50 ($280,800 total) 6.30 2.40 ($149,760 total) $34.50 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 93,600 Bits each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the current 62,400 units each year if it were willing to increase the fixed selling expenses by $102,000. a. Calculate the incremental net operating income. Incremental operating income 2. Assume again that Ovation Company has sufficient capacity to produce 93,600 Bits each year. A customer in a foreign market wants to purchase 15,600 Bits. Import duties on the Bits would be $1.70 per unit, and costs for permits and licences would be $7,020. Both import duties and permits and licenses will be paid by Ovation. The only selling costs that would be associated with the order are $2.70 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 3. The company has 1,000 Bits 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 unit cost figure is relevant for setting a minimum selling price? (Round your answer to 2 decimal places.) Relevant unit cost