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Andretti Company has a single product called a Dak. The company normally produces and sells 82,000 Daks each year at a seling price of $54 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct lobor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Tixed selling expenses Total conti per unit $ 7.50 8.00 1.90 4.00 (5328,000 total) 1.70 3.00 ($246,000 total) $26.10 A number of questions relating to the production and sale of Daks follow. Each question is independent Required: 1-0. Assume that Andretti Company has sufficient capacity to produce 110,700 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 82,000 units each year if it were willing to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage) of investing an additional $110,000 in fixed selling expenses? 1-6. Would the additional Investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 110,700 Daks each year. A customer in a foreign market wants to purchase 28,700 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $2.70 per unit and an additional $25.830 for permits and licenses. The only selling costs that would be associated with the order would be $1.40 per unit shipping cost. What is the break-even price per unit on this order? 3. The company has 500 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, Andrett Company is unable to purchase more material for the production of Dakes. 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, Andrett could close its plent 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 seiling expenses would be reduced hv 20% during the two month naried Complete this question by entering your answers in the tabs below. Req 1A Reg 18 Reg 2 Req3 Req 4A to 4C Req 4D Reg 5 Assume that Andretti Company has sufficient capacity to produce 110,700 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 82,000 units each year if it were willing to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage) of Investing an additional $110,000 in fixed selling expenses? Show less Rel1 Req 18> Complete this question by entering your answers in the tabs below. Reg 1A Reg 10 Reg 2 Reg 3 Reg 4 to 4C Req 4D Req 5 Assume again that Andretti Company has sufficient capacity to produce 110,700 Daks each year. A customer in a foreign marloet wants to purchase 28,700 Daks. If Andretti accepts this order it would have to pay Import duties on the Daks of $2.70 per unit and an additional $25,830 for permits and licenses. The only selling costs that would be associated with the order would be $1.40 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places.) Show less Broak oven price per unit Complete this question by entering your answers in the tabs below. Reg 4D Reg 5 Reg LA Reg 1B Reg 2 Req 3 Req 4A to 4C An outside manufacturer has offered to produce 82,000 Doks and ship them directly to Andretti's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be ide; 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? (Do not round intermediate calculations, Round your answers to 2 decimal places.) Show less Avidable cont per unit

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