Problem 12-18 Relevant Cost Analysis in a variety of Situations [LO12-2, L012-3, L012-4) Andretti Company has a single product called a Dak. The company normally produces and sells 89,000 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 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 9.50 8.00 3.20 8.00 ($712,000 total) 2.70 3.50 ($311,500 total) $34.90 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 115,700 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 30% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $150,000. What is the financial advantage (disadvantage) of investing an additional $150,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 115.700 Daks each year. A customer in a foreign market wants to purchase 26,700 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $4.70 per unit and an additional $18,690 for permits and licenses. The only selling costs that would be associated with the order would be $260 per unit