Q1: Due to a strike in its supplier's plantm 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 enoug material on hand toi operate at 25% of normal levels for the 2 month period., As an aternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the 2 months period and the fixed selling expenses would be reduced by 20%. What would be the impact on profits of closing the plant for 2 months period? Find: Contribution margin lost, Fixed man overhead cost and Fixed selling cost. Net disadvantage of closing the plant is : Q5: An outisde manufacturer has offred to produce Daks and ship them directly to Andretti's customers. If Andretti Company Accepts this offer, the fcilities that it uses to

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. Compute the unit cost that is relevant for comparison to the price quoted by the outside manufacturer. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Find: Variable man ovh costs; Fixed manufacturing ovh cost; variable selling expense, and TOtal cost avoided

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 $50 per unit. The company's unit costs at this level of activity are given below: Direct materials $ 7.50 Direct labor 11.00 Variable manufacturing overhead 2.50 Fixed manufacturing overhead 5.00 ($430,000 total) Variable selling expenses 1.70 Fixed selling expenses 4.50 ($387,000 total) Total cost per unit $ 32.20 A number of questions relating to the production and sale of Daks follow. Each question is independent. Q1: Due to a strike in its supplier's plantm 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 enoug material on hand toi operate at 25% of normal levels for the 2 month period., As an aternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the 2 months period and the fixed selling expenses would be reduced by 20%. What would be the impact on profits of closing the plant for 2 months period? Find: Contribution margin lost, Fixed man overhead cost and Fixed selling cost. Net disadvantage of closing the plant is Q5: An outisde manufacturer has offred to produce Daks and ship them directly to Andretti's customers. If Andretti Company Accepts this offer, the fcilities that it uses to 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. Compute the unit cost that is relevant for comparison to the price quoted by the outside manufacturer. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Find: Variable man ovh costs; Fixed manufacturing ovh cost; variable selling expense, and TOtal cost avoided