Please answer all these questions and fill in the blanks as they ask you to do so, and show explanations.

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Chapter 13 Foundational i Saved Help Save & Exit Submit Required information [The following information applies to the questions displayed below.] Part 1 of 15 Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 10 Alpha Beta points Direct materials $ 25 $ 10 Direct labor 22 21 17 Skipped Variable manufacturing overhead Traceable fixed manufacturing overhead 18 20 Variable selling expenses 14 10 Common fixed expenses 17 12 eBook Total cost per unit $ 113 $ 80 References The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? Alpha Beta Traceable fixed manufacturing overheadChapter 13 Foundational 0 Saved Help 20 Part 2 of15 - 10 points eBook References Required information [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha s 25 22 17 18 14 17 $ 113 Beta s 10 21 7 20 10 12 $80 The company considers its traceable xed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 2. What is the company's total amount of common xed expenses? Save 8. Exlt Submit Chapter 13 Foundational 0 Saved Help ; Required information Part3 of15 - 10 points eBook References [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials 3; 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 Variable selling expenses 14 10 Common fixed expenses 17 12 Total cost per unit 15 113 $ 80 The company considers its traceable xed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 3. Assume that Cane expects to produce and sell 82,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 12,000 additional Alphas for a price of $88 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? ::| Save & Exit Submit Chapter 13 Foundational 0 Saved Help 4 Required information Part 4 ONE - 10 points eBook References [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 Variable selling expenses 14 10 Common fixed expenses 17 12 Total cost per unit 1; 113 $ 80 The company considers its traceable xed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 4. Assume that Cane expects to produce and sell 92,000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 2,000 additional Betas for a price of $41 per unit. What is the nancial advantage (disadvantage) of accepting the new customer's order? :l: Save 8. Exit Submit Chapter 13 Foundational 0 Saved Help Save 8. Exit Submit uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: ! i Alpha Beta Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 Part 5 ONE Variable selling expenses 14 10 - Common fixed expenses 17 12 Total cost per unit 15 113 $ 80 grams The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. eBook References 5. Assume that Cane expects to produce and sell 97,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 12,000 additional Alphas for a price of $88 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 7,000 units. a. What is the nancial advantage (disadvantage) of accepting the new customer's order? b. Based on your calculations above should the special order be accepted? Complete this question by entering your answers in the tabs below. What is the nancial advantage (disadvantage) of accepting the new customer's order? ::| Chapter 13 Foundational 0 Saved Help 60 Part 6 ONE 10 points eBook References Required information [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha s 25 22 17 18 14 17 $ 113 Beta s 10 21 7 20 10 12 $80 The company considers its traceable xed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 6. Assume that Cane normally produces and sells 92,000 Betas per year. What is the nancial advantage (disadvantage) of discontinuing the Beta product line? ::| Save 8. Exit Submit Chapter 13 Foundational 0 Saved Help Save 8. Exit Submit ; Required information [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product Pan-IONS uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 10 Alpha Beta points Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 93k Variable selling expenses 14 10 Common fixed expenses 17 12 Raferences Total cost per unit 15 113 $ 80 The company considers its traceable xed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 7. Assume that Cane normally produces and sells 42,000 Betas per year. What is the nancial advantage (disadvantage) of discontinuing the Beta product line? ::| Chapter 13 Foundational 0 Saved Help 8 Required information Part 8 ONE _ 10 points eBook References [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 Variable selling expenses 14 10 Common fixed expenses 17 12 Total cost per unit 1; 113 $ 80 The company considers its traceable xed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 8. Assume that Cane normally produces and sells 62,000 Betas and 82,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 17,000 units. What is the nancial advantage (disadvantage) of discontinuing the Beta product line? :Zl Save 8. Exit Submit Chapter 13 Foundational 0 Saved Help 9 Required information Part 9 ONE 10 points eBook References [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 Variable selling expenses 14 10 Common fixed expenses 17 12 Total cost per unit 1; 113 $ 80 The company considers its traceable xed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 9. Assume that Cane expects to produce and sell 82,000 Alphas during the current year. A supplier has offered to manufacture and deliver 82,000 Alphas to Cane for a price of $88 per unit. What is the nancial advantage (disadvantage) of buying 82,000 units from the supplier instead of making those units? :Zl Save 8. Exit Submit Chapter 13 Foundational 0 Saved Help 10 Part 10 of15 10 points eBook References Required information [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 Variable selling expenses 14 10 Common fixed expenses 17 12 Total cost per unit 1; 113 $ 80 The company considers its traceable xed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 10. Assume that Cane expects to produce and sell 52,000 Alphas during the current year. A supplier has offered to manufacture and deliver 52,000 Alphas to Cane for a price of $88 per unit. What is the financial advantage (disadvantage) of buying 52,000 units from the supplier instead of making those units? :Zl Save 8. Exit Submit Chapter 13 Foundational 0 Saved Help Save 8. Exlt Submit 1 1 Required information [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product Pa" 11 f15 uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 10 Alpha Beta points Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 eBk Variable selling expenses 14 10 Common fixed expenses # Raferences Total cost per unit 15 113 $ 80 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 11. How many pounds of raw material are needed to make one unit of each of the two products? Pounds of raw materials per unit - _ Chapter 13 Foundational 0 Saved Help Save 8. Exlt Submit 1 2 Required information [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product Pa" 12 \"15 uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 10 Alpha Beta points Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 eBk Variable selling expenses 14 10 Common fixed expenses # Raferences Total cost per unit 15 113 $ 80 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 12. What contribution margin per pound of raw material is earned by each of the two products? (Round your answers to 2 decimal places.) Contribution margin per pound __ Chapter 13 Foundational 0 Saved Help 13 Part 13 of 15 10 points eBook References Required information [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 Variable selling expenses 14 10 Common fixed expenses 17 12 Total cost per unit 1; 113 $ 80 The company considers its traceable xed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 13. Assume that Cane's customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the raw material available for production is limited to 162,000 pounds. How many units of each product should Cane produce to maximize its profits? Save 8. Exlt Submit Chapter 13 Foundational 0 Saved Help 14 Part 14 of15 10 points eBook References Required information [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 Variable selling expenses 14 10 Common fixed expenses 17 12 Total cost per unit 1; 113 $ 80 The company considers its traceable xed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 14. Assume that Cane's customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the raw material available for production is limited to 162,000 pounds. What is the total contribution margin Cane Company will earn? Save 8. Exlt Submit Chapter 13 Foundational 0 Saved Help 15 Part 15 of15 _ 10 points eBook References Required information [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 25 $ 10 Direct labor 22 21 Variable manufacturing overhead 17 7 Traceable fixed manufacturing overhead 18 20 Variable selling expenses 14 10 Common fixed expenses 17 12 Total cost per unit 1; 113 $ 80 The company considers its traceable xed manufacturing overhead to be avoidable, whereas its common xed expenses are unavoidable and have been allocated to products based on sales dollars. 15. Assume that Cane's customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the company's raw material available for production is limited to 162,000 pounds. If Cane uses its 162,000 pounds of raw materials, up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.) Save 8. Exlt Submit Chapter 13 o 10 points eBook References Saved Help Andretti Company has a single product called a Dak. The company normally produces and sells 86,000 Daks each year at a selling price of $58 per unit. The company's unit costs at this level of activity are given below: Direct materials $ 7.50 Direct labor 9.00 Variable manufacturing overhead 3.00 Fixed manufacturing overhead 3.00 ($258,000 total) Variable selling expenses 3.70 Fixed selling expenses 3.50 ($301,000 total) Total cost per unit $ 29.70 A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1a. Assume that Andretti Company has sufcient capacity to produce 120,400 Daks each year without any increase in xed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 86,000 units each year if it were willing to increase the xed selling expenses by $140,000. What is the nancial advantage (disadvantage) of investing an additional $140,000 in xed selling expenses? 1-b. Would the additional investment bejustied? 2. Assume again that Andretti Company has sufcient capacity to produce 120,400 Daks each year. A customer in a foreign market wants to purchase 34,400 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $24,080 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 900 Daks 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 is the unit cost gure that is relevant for setting a minimum selling price? 4. 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 25% of normal levels for the twomonth period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, xed manufacturing overhead costs would continue at 35% of their normal level during the twomonth period and the fixed selling expenses would be reduced by 20% during the two-month period. a. How much total contribution margin will Andretti forgo if it closes the plant for two months? b. How much total xed cost will the company avoid if it closes the plant for two months? Save 8. Exit Submit Chapter 13 i Saved Help Save & Exit Submit irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price? 3 4. 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 25% 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 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period. 10 a. How much total contribution margin will Andretti forgo if it closes the plant for two months? points b. How much total fixed cost will the company avoid if it closes the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? eBook References 5. An outside manufacturer has offered to produce 86,000 Daks and ship them directly to Andretti's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two- thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Req 4A to 4C Req 4D Req 5 Assume that Andretti Company has sufficient capacity to produce 120,400 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 86,000 units each year if it were willing to increase the fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed selling expenses? Show lessChapter 13 o 3 10 points eBook References Saved Help 9. .u- emupun, nu. dvv vul\\-) m. um... um. nun. gum- lllhsululluyu u\"... an. Linlylvlv \\pvlleluyluu .u .4- uuvvlluq. Vu'. m we irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price? 4. 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 25% 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 35% of their normal level during the two-month period and the xed selling expenses would be reduced by 20% during the twomonth period. a. How much total contribution margin will Andretti forgo if it closes the plant for two months? b. How much total xed cost will the company avoid if it closes the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 86,000 Daks and ship them directly to Andretti's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, xed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two- thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? Complete this question by entering your answers in the tabs below. Req 4A to 4c Req 4D Req 1A Req lB Req 2 H Req 3 i i Assume that Andretti Company has sufficient capacity to produce 120,400 Daks each year without any increase in xed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 86,000 units each year if it were willing to increase the xed selling expenses by $140,000. Would the additional investment be justied? Save 5 Exit Submit Chapter 13 i Saved Help Save & Exit Submit irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price? 3 4. 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 25% 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 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period 10 a. How much total contribution margin will Andretti forgo if it closes the plant for two months? points b. How much total fixed cost will the company avoid if it closes the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? eBook 5. An outside manufacturer has offered to produce 86,000 Daks and ship them directly to Andretti's customers. If Andretti Company References accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two- thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Req 4A to 4C Req 4D Req 5 Assume again that Andretti Company has sufficient capacity to produce 120,400 Daks each year. A customer in a foreign market wants to purchase 34,400 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $24,080 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? (Round your answers to 2 decimal places.) Show less Break-even price per unit 3Chapter 13 0 Saved Help Saves. Exit Submit lrregularltles, it Will be impossmle to sell these unlts at the normal price through regular dlstnbutlon channels. What ls the unit cost figure that is relevant for setting a minimum selling price? 4. 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 25% 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 35% of their normal level during the two-month period and the xed selling expenses would be reduced by 20% during the two-month period. a. How much total contribution margin will Andretti forgo if it closes the plant for two months? b. How much total xed cost will the company avoid if it closes the plant for two months? c. What is the nancial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? 10 points B k e 00 5. An outside manufacturer has offered to produce 86,000 Daks and ship them directly to Andretti's customers. If Andretti Company References accepts this offer, the facilities that it uses to produce Daks would be idle; however, xed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two- thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? Complete thls questlon by entering your answers In the tabs below. Req 1A Req lB Req 2 Req 4A to 4C Req 4D Req 5 The company has 900 Daks on hand that have some lrregularltles 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 is the unit cost gure that is relevant for setting a minimum selling price? (Round your answer to 2 decimal places.) Chapter 13 i Saved Help Save & Exit Submit thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? 3 Complete this question by entering your answers in the tabs below. 10 Req 1A Req 1B Req 2 Req 3 Req 4A to 4C Req 4D Req 5 points 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 25% of normal levels eBook 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 35% of their normal level during the two-month period and the References fixed selling expenses would be reduced by 20% during the two-month period. (Round number of units produced to the nearest whole number. Round your intermediate calculations and final answers to 2 decimal places. Any losses/reductions should be indicated by a minus sign.) a. How much total contribution margin will Andretti forgo if it closes the plant for two months? b. How much total fixed cost will the company avoid if it closes the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? Show less Forgone contribution margin Total avoidable fixed costs Financial advantage (disadvantage) 3Chapter 13 i Saved Help Save & Exit Submit 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 35% of their normal level during the two-month period and the fixed selling expenses would be 3 reduced by 20% during the two-month period. a. How much total contribution margin will Andretti forgo if it closes the plant for two months? b. How much total fixed cost will the company avoid if it closes the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? 10 points 5. An outside manufacturer has offered to produce 86,000 Daks and ship them directly to Andretti's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two- eBook thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside References manufacturer? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3 Req 4A to 4C Req 4D Req 5 An outside manufacturer has offered to produce 86,000 Daks and ship them directly to Andretti's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside manufacturer? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Show less Avoidable cost per unit Req 4D Req 5 > 3Chapter 13 o 10 points eBook Hint References Saved Help Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 50,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 15 $ 750,000 Direct labor 10 500,000 Variable manufacturing overhead 3 150,000 Fixed manufacturing overhead 9 450,000 Variable selling expense 2 100,000 Fixed selling expense 6 300,000 Total cost $ 45 $ 2,250,000 The Rets normally sell for $50 each. Fixed manufacturing overhead is $450,000 per year within the range of 41,000 through 50,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 41,000 Rets through regular channels next year. A large retail chain has offered to purchase 9,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company would have to purchase a special machine to engrave the retail chain's name on the 9,000 units. This machine would cost $18,000. Polaski Company has no assurance that the retail chain will purchase additional units in the future. What is the nancial advantage (disadvantage) of accepting the special order? (Round your intermediate calculations to 2 decimal places.) 2. Refer to the original data. Assume again that Polaski Company expects to sell only 41,000 Rets through regular channels next year. The U.S. Army would like to make a one-time-only purchase of 9,000 Rets. The Army would reimburse Polaski for all of the variable and fixed production costs assigned to the units by the company's absorption costing system, plus it would pay an additional fee of $1.20 per unit. Because the army would pick up the Rets with its own trucks, there would be no variable selling expenses associated with this order. What is the financial advantage (disadvantage) of accepting the U.S. Army's special order? 3. Assume the same situation as described in (2) above, except that the company expects to sell 50,000 Rets through regular channels next year. Thus, accepting the U.S. Army's order would require giving up regular sales of 9,000 Rets. Given this new information, what is the nancial advantage (disadvantage) of accepting the U.S. Army's special order? fKI Save 5 Exit Submit Chapter 13 0 Saved Help Saves. Exit Submit The Rets normally sell for $50 each. Fixed manufacturing overhead is $450,000 per year within the range of 41,000 through 50,000 Rets per year. Required: 5 1. Assume that due to a recession, Polaski Company expects to sell only 41,000 Rets through regular channels next year. A large retail chain has offered to purchase 9,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company would have to 10 purchase a special machine to engrave the retail chain's name on the 9,000 units. This machine would cost $18,000. Polaski Company has no assurance that the retail chain will purchase additional units in the future. What is the nancial advantage (disadvantage) of o'nts p I accepting the special order? (Round your intermediate calculations to 2 decimal places.) eBook 2. Refer to the original data. Assume again that Polaski Company expects to sell only 41,000 Rets through regular channels next year. The US. Army would like to make a one-time-only purchase of 9,000 Rets. The Army would reimburse Polaski for all of the variable Hint and fixed production costs assigned to the units by the company's absorption costing system, plus it would pay an additional fee of R f $1.20 per unit. Because the army would pick up the Rets with its own trucks, there would be no variable selling expenses associated e erences with this order. What is the financial advantage (disadvantage) of accepting the U.S. Army's special order? 3. Assume the same situation as described in (2) above, except that the company expects to sell 50,000 Rets through regular channels next year. Thus, accepting the Us. Army's order would require giving up regular sales of 9,000 Rets. Given this new information, what is the nancial advantage (disadvantage) of accepting the US. Army's special order