References 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 $56 per unit. The company's unit costs at this level of activity are given below: Direct materials 35 7.50 Direct labor 9.00 Variable manufacturing overhead 2.50 Fixed manufacturing overhead 9.00 ($801,000 total) Variable selling expenses 1.70 Fixed selling expenses 3.00 ($267,000 total) Total cost per unit $ 32.70 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 106,800 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $110,000. What is the nancial advantage (disadvantage) of investing an additional $110,000 in fixed selling expenses? 1b. Would the additional investment bejustied? 2. Assume again that Andretti Company has sufcient capacity to produce 106,800 Daks each year. A customer in a foreign market wants to purchase 17,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $10,680 for permits and licenses. The only selling costs that would be associated with the order would be $2.20 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 irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price? 4. Due to a strike in its supplier's 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 35% of their normal level during the twomonth period and the xed selling expenses would be reduced by 20% during the twomonth period. a. How much total contribution margin will 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 financial advantage (disadvantage) of closing the plant for the two-month period? A Chm .m Andrnt rlncn the nlnnt fnr hun mnnfhc? References figure that is relevant for setting a minimum selling price? 4. Due to a strike in its supplier's 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 35% of their normal level during the twomonth period and the xed selling expenses would be reduced by 20% during the twomonth period. a. How much total contribution margin will 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 financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 89,000 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. Req 1A Req 13 Reg 2 Req 3 Req 4A to 4c Req 4D Req 5 Assume that Andretti Company has sufficient capacity to produce 106,800 Daks each year without any increase in xed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 89,000 units each year if it were willing to increase the xed selling expenses by $110,000. What is the nancial advantage (disadvantage) of investing an additional $110,000 in fixed selling expenses? Show lessA References figure that is relevant for setting a minimum selling price? 4. Due to a strike in its supplier's 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 35% of their normal level during the twomonth period and the xed selling expenses would be reduced by 20% during the twomonth period. a. How much total contribution margin will 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 financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 89,000 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. Req 1A Req 2 Req 3 Req 4A to 4c Req 4D Req 5 Assume that Andretti Company has sufficient capacity to produce 106,800 Daks each year without any increase in xed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 89,000 units each year if it were willing to increase the xed selling expenses by $110,000. Would the additional investment be justified? References figure that is relevant for setting a minimum selling price? 4. Due to a strike in its supplier's 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 35% of their normal level during the twomonth period and the xed selling expenses would be reduced by 20% during the twomonth period. a. How much total contribution margin will 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 financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 89,000 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. Req 1A Req 13 Req 2 Req 3 Req 4A to 4c Req 4D Req 5 Assume again that Andretti Company has sufcient capacity to produce 106,800 Daks each year. A customer in a foreign market wants to purchase 17,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $10,680 for permits and licenses. The only selling costs that would be associated with the order would be $2.20 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places.) Show lessA Break-even price per unit I I References figure that is relevant for setting a minimum selling price? 4. Due to a strike in its supplier's 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 35% of their normal level during the twomonth period and the xed selling expenses would be reduced by 20% during the twomonth period. a. How much total contribution margin will 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 financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 89,000 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 oftheir 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. Req 1A Req 13 Req 2 Req 4A to 4c Req 4D Req 5 The company has 800 Daks on hand that have some irregularities and are therefore considered to be "seconds." Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost gure that is relevant for setting a minimum selling price? (Round your answer to 2 decimal places.) Relevant unit oust I per unit References >4. l IUVV nun.\" LVLuI IIACU yuan. vvm unc vvillyuliy uku u n. uvoca Linc ylulll. nu: wvv munwo: c. What is the financial advantage (disadvantage) of closing the plant for the twomonth period? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 89,000 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. Req 1A Req lB Req 2 Req 3 Req 4A to 4C Req 4D Req 5 Due to a strike in its supplier's 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 35% of their normal level during the twomonth period and the xed selling expenses would be reduced by 20% during the two-month period. (Round number of units produced to the nearest whole number. Round your intermediate calculations and final answers to 2 decimal places. Any losses/reductions should be indicated by a minus sign.) a. How much total contribution margin will Andretti forgo if it closes the plant for two months? b. How much total xed cost will the company avoid if it closes the plant for two months? c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? Show lessA Forgone contribution margin Total avoidable xed costs Financial advantage (disadvantage) 5 W. I JUVV IIIULII LULUI INAGU LUOL VVIII LIC CUTTINGILY UVUIU II IL LIVSES LITIC PIIL IVI LVVV IIIVIIIIS: c. What is the financial advantage (disadvantage) of closing the plant for the two-month period? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 89,000 Daks and ship them directly to Andretti's customers. If Andretti Company 20 accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be points 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? eBook Complete this question by entering your answers in the tabs below. Print Req 1A Req 1B Req 2 Req 3 Req 4A to 4C Req 4D Req 5 Due to a strike in its supplier's plant, Andretti Company is unable to purchase more material for the production of Daks. The References 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 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period. Should Andretti close the plant for two months? Show less Yes ONO References 0. . M. "M... tum. MW wot w... ulc comma\