Complete this question by entering your answers in the tabs below. Assume that Andretti Company has sufficient capacity to produce 107,900 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 30% above the present 83,000 units each year if it were willing to increase the fixed selling expenses by $130,000. Would the additional investment be fustified? ceepts this offer, the facilities that it uses to produce Daks would be idie; however, fixed manufacturing overhead costs would be educed by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only twohirds of their present amount. What is Andretti's avoidable cost per unit that it should compare to the price quoted by the outside nanufacturer? Complete this question by entering your answers in the tabs below. 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 dosed, fored manufacturing overhead costs would continue at 40% of their normal level during the two-month period and the foced selling expenses would be reduced by 20% during the two-month period. Should Andretu close the plant for two months? Andretti Company has a single product called a Dak. The company normally peodoces and sells 83,000 Daks each year at a selling price of $62 per unit. The company's unit costs at this level of activity are given below: A number of cuestions relating to the production and sale of Daks follow. Each question is independent. Required: Required: ta. Assume that Andrett Company bas sumficient capacity to produce 107,900 Daks each year without any increase in fixpd manufacturing overthead costs. The compary could increase its unit sales by 30% abowe the present 83,000 units each year if it were wiling to increase the fixed seling expenses by $130,000. What is the financiai advantage (disadvantiage) of investing an adddional $130,000 in fored selling expenses? 1b. Would the additional imvestmont be justified? 2. Assume again that Andretri Compony has sufficiont capacity to produce 107,900 Daks each year. A customer in a foreign market. 2. Assume again that Andretir Conipany hus sulficiont capactsy to ptoduce 107,900 Duks eachycar on the Daks of $3,70 pet unit and an additional $17.430 for permits arid licenses. The only solling costs that would be assoclated with the order would be $2.10 per unit shipping cost. What is the break-even price per unit on this order? 3. The company has 700 Disks on hand that have some irregularities and are therefore considered to be "seconds "Dve to the irregularties. I wil be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for sotting a minimum selling price? 4. Due to a strike in its supplier's plant. Andrelt Company is unable to purchase more matenai for the production of Daks. The strike is expected to last for two months. Andrets Company has enough material on hand to operate of 25% of normal levels for the two month period. As an altemative. Andretti could close its plant down entirely for the fwo months. If the plant were closed, ficed manufacturing overhood costs would continue at 405 of their normal level during the two-month period and the fixod selling expenses would be overhead costs would continue at 40% of their normal levol during the two-month period and the foxed selling expenses would be reduced by 20% during the two-month 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 advantoge (disadvantage) of closing the plant for the two-month period? d. Should Andretti clase the plant for two months? 5. An outside manufacturer has offered to produce 83,000 Daks and ship them directly to Andretti's customers. If Andrett 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 twothirds of their present amount. What is Andrett's avoldable 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. Assume that Andretti Company has sufficient capacty to produce 107,900 Daks each year without any increase in fixed it were willing to increase the fixed selling expenses by $130,000. What is the financial advantage (disadvantage) of investing an additional $130,000 in fxed selling expenses? d. Should Andretti close the plant for two months? 5. An outside manufacturer has offered to produce 83,000 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 manufocturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only twothirds 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. The company has 700 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? (Round your answer to 2 decimal places.) accepts this offer, the faclities 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 twothirds of their present amount. What is Andrett's avoidable cost per unit that if should compare to the price quoted by the outside manufacturer? Complete this question by entering your answers in the tabs below. 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 40% of their normal level during the two-month period and the fixed 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 or 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 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? Complete this question by entering your answers in the tabs below. Assume again that Andretti Company has sufficient capacity to produce 107,900 Daks each year. A customer in a foreign market wants to purchase 24,900 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $17,430 for permits and licenses. The only selling costs that would be associated with the order would be $2.10 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places.) reduced by 30x. Becouse the outside manufacturer would pay for all shipping costs, the variable selting expenses would be only two: thirds of their present amount. What is Andretti's woidable cost per unit that it should compare to the price cuioted by the outside manufacturer? Complete this question by entering your answers in the tabs below. An outside manufacturer has offered to produce 83,000 Daks and ship them directly to Andrettis customers. If Andrecti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, foced manufacturing overhesd 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 avoldable cost per unit that it should compare to the price quoted by the outside manufacturer? (Do not round intermediate calculations. Round vour answers to 2 decimal places.)
