Problem 12-18 Relevant Cost Analysis in a Variety of Situations [L012-2, LO12-3, LO12-4] 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 $60 per unit. The company's unit costs at this level of activity are given below: Direct materials $ 9.50 Direct labor 10.00 Variable manufacturing overhead 2.00 Fixed manufacturing overhead ($774,000 total) 9.00 Variable selling expenses 2.70 4.00 ($344, 000 total) Fixed selling expenses $37.20 Total cost per unit A number of questions relating to the production and sale of Daks follow. Each question is independent. quired: 4. Due to a strike in its suppliers 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 30 % of their normal level during the two-month perlod and the foxed selling expenses would be reduced by 20% during the two-month perlod a. How much total contribution margin willl 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 financlal advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months