re https/ ent -3 Week t Problems Problem 12-18 Relevant Cost Analysis in a Variety of Situations LO12-2, L012-3, LO124] Andretti Company has a single product called a Dak. The company normaly produces and sells 85,000 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 nanufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit 10.00 (s8se,000 total) 4.58 (3382,see total) A number of questions relating to the production and sale of Daks follow. Each question is independent Required: -a. Assume that Andretti Company has sufficient capacity to produce 102 000 Daks each year without any increase in fixed manufacturing overhead costs The company could increase its unit sales by 20% above the present 85,000 units each year f t were witing to increese the fixed selling expenses by Sto,000. What is the financial advantage idisadvantage) of investing an edditional $110,000 in fixed selling expenses? 1-b. Would the additional investment be justified? 2 Assume again that Andretti Company has sufficient capecity to produce 102,000 Daks eoch year A customer in a foreign market wants to purchase 17.000 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $2.70 per unit and an additional $13,600 for permits and licenses. The only selling costs that would be associated with the order would be $2.40 per unit shipping cost. What is the break-even price per unit on this order? 3. The company has 800 Daks on hand that have some irregularities and are therefore considered to be 'seconds. Due to the regularties, t wll be impossible to sell these units at the normal price through regular distrbution channels. Whet is the unit cost C Prev f3 Next search TOSHIBA