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Problem 10-18A Relevant Cost Analysis in a Variety of Situations [L010-2, LO10-3, L010-4] Andretti Company has a single product called a Dak. The company normally
Problem 10-18A Relevant Cost Analysis in a Variety of Situations [L010-2, LO10-3, L010-4] Andretti Company has a single product called a Dak. The company normally produces and sells 78,000 Daks each year at a selling price of $42 per unit. The company's unit costs at this level of activity are given below i Direct materials S 6.50 Direct labor Variable manufacturing overhead 12.00 2.20 i Fixed manufacturing overhead 9.00 ($702,000 total) 4.70 Variable selling expenses Fixed selling expenses 4.50 ($351,000 total) Total cost per unit 38.90 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 101,400 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 30% above the present 78,000 units each year if it were willing to increase the fixed selling expenses by $150,000. Calculate the incremental net operating income. (Round all dollar amounts to 2 decimal places) Increased sales in units Contribution margin per unit Incremental contribution margin Less added fixed selling Incremental net operati This is a numeric cell, so please enter numbers only
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