Problem 13-18 REV (Algo) Relevant Cost Analysis in a Variety of Situations [LO13-2, LO13-3, LO13-4] Andretti Company has a single product called a Dak. The company normally produces and sells 82,000 Daks each year at a selling price of $64 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 $ 8.50 11.00 2.80 6.00 ($492,000 total) 2.70 3.50 ($287,000 total) $34.50 A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1. An outside manufacturer has offered to produce 82,000 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. < Prev 4 of 4 Next >