PLEASE FIX RED

Andretti Company has a single product called a Dak. The company normally produces and sells 81,000 Daks each year at a selling price of $44 per unit. The company's unit costs at this level of activity are given below: $ 9.50 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses 8.00 3.40 6.00 ($486,000 total) 3.70 4.50 ($364,500 total) Total cost per unit $ 35.10 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 101,250 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the present 81,000 units each year if it were willing to increase the fixed selling expenses by $100,000. Calculate the incremental net operating income. (Round all dollar amounts to 2 decimal places.) Answer is complete and correct. Increased sales in units Contribution margin per unit Incremental contribution margin Less added fixed selling expense Incremental net operating income 20,250 $19.40 $ 392,850.00 100,000.00 $ 292,850.00