Requesting assistant with 's 2 3 Andretti Company has a single product called a Dak The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit The companys unit costs at this level of activity are given below Direct materials $ 10 00 Direct labor 4 50 Variable manufacturing overhead 2 30 Fixed manufacturing overhead 5 00 ($300,000 total) Variable selling expenses 1 20 Fixed selling expenses 3 50 ($210,000 total) Total cost per unit $ 26 50 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 90,000 Daks each year without any increase in fixed manufacturing overhead costs The company could increase its sales by 25 above the present 60,000 units each year if it were willing to increase the fixed selling expenses by $80,000 Calculate the incremental net operating income Increased sales in units 15,000 Contribution margin per unit $14 Incremental contribution margin $210,000 Less added fixed selling expense 80,000 Incremental net operating income $130,000 1 b Would the increased fixed selling expenses be justified No Yes 2 Assume again that Andretti Company has sufficient capacity to produce 90,000 Daks each year A customer in a foreign market wants to purchase 20,000 Daks Import duties on the Daks would be $1 70 per unit, and costs for permits and licenses would be $9,000 The only selling costs that would be associated with the order would be $3 20 per unit shipping cost Compute the per unit break even price on this order (Round your answers to 2 decimal places ) Variable manufacturing cost per unit Import duties per unit Permits and licenses Shipping cost per unit Break even price per unit $0 00 3 The company has 1,000 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 unit cost figure is relevant for setting a minimum selling price (Round your answer to 2 decimal places ) Relevant unit cost per unit

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Requesting assistant with #'s 2 & 3. Andretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each

Requesting assistant with #'s 2 & 3.

Andretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The companys unit costs at this level of activity are given below:


Direct materials	$	10.00
Direct labor		4.50
Variable manufacturing overhead		2.30
Fixed manufacturing overhead		5.00	($300,000 total)
Variable selling expenses		1.20
Fixed selling expenses		3.50	($210,000 total)
Total cost per unit	$	26.50

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 90,000 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the present 60,000 units each year if it were willing to increase the fixed selling expenses by $80,000. Calculate the incremental net operating income.


Increased sales in units	15,000
Contribution margin per unit	$14
Incremental contribution margin	$210,000
Less added fixed selling expense	80,000
Incremental net operating income	$130,000

1-b. Would the increased fixed selling expenses be justified?

	No
	Yes

2. Assume again that Andretti Company has sufficient capacity to produce 90,000 Daks each year. A customer in a foreign market wants to purchase 20,000 Daks. Import duties on the Daks would be $1.70 per unit, and costs for permits and licenses would be $9,000. The only selling costs that would be associated with the order would be $3.20 per unit shipping cost. Compute the per unit break-even price on this order. (Round your answers to 2 decimal places.)


Variable manufacturing cost per unit
Import duties per unit
Permits and licenses
Shipping cost per unit
Break-even price per unit	$0.00

3. The company has 1,000 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 unit cost figure is relevant for setting a minimum selling price? (Round your answer to 2 decimal places.)