I need help with a managerial accounting question. All parts pertain to the same question.
Andretti Company has a single product called a Dak. The company normally produces and sells 87,000 Daks each year at a selling price of $60 per unit. The company's unit costs at this level of activity are given below: Direct materials $ 6.50 Direct labor 11.00 Variable manufacturing overhead 2.00 Fixed manufacturing overhead 9.00 ($783,000 total) Variable selling expenses 3.70 Fixed selling expenses 3.50 ($304,500 total) Total cost per unit $35-70 ' A number ofquestions 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 121,800 Daks each year without any increase in xed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 87,000 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 xed selling expenses? 1-b. Would the additional investment bejustied? 2. Assume again that Andretti Company has sufficient capacity to produce 121,800 Daks each year. A customer in a foreign market wants to purchase 34,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $20,880 for permits and licenses. The only selling costs that would be associated with the order would be $2.30 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 gure 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, xed manufacturing overhead costs would continue at 30% of their normal level during the two-month period and the xed 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 xed cost will the company avoid if it closes the plant for two months? c. What is the nancial 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 87,000 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, xed 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 thls question by enterlng your answers In the tabs below. Reg 13 Reg 2 Req 3 Reg 4A to 4C Req 4D Reg 5 Assume that Andretti Company has sufcient capacity to produce 121,000 Daks each year without any increase in xed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 87,000 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 xed selling expenses? :EI Show IessA Andretti Company has a single product called a Dak. The company normally produces and sells 87,000 Daks each year at a selling price of $60 per unit. The company's unit costs at this level of activity are given below: Direct materials $ 6.50 Direct labor 11.00 Variable manufacturing overhead 2.00 Fixed manufacturing overhead 9.00 ($783,000 total) Variable selling expenses 3.70 Fixed selling expenses 3.50 ($304,500 total) Total cost per unit $35-70 ' A number ofquestions 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 121,800 Daks each year without any increase in xed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 87,000 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 xed selling expenses? 1-b. Would the additional investment bejustied? 2. Assume again that Andretti Company has sufcient capacity to produce 121,800 Daks each year. A customer in a foreign market wants to purchase 34,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $20,880 for permits and licenses. The only selling costs that would be associated with the order would be $2.30 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 gure 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, xed manufacturing overhead costs would continue at 30% of their normal level during the two-month period and the xed 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 xed cost will the company avoid if it closes the plant for two months? c. What is the nancial 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 87,000 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, xed 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 thls question by enterlng your answers In the tabs below. Req 1A Reg 2 Req 3 Reg 4A to 4C Req 4D Reg 5 Assume that Andretti Company has sufcient capacity to produce 121,000 Daks each year without any increase in xed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 87,000 units each year if it were willing to increase the xed selling expenses by $110,000. Would the additional investment be justied? ( Req1A Reqz ) Andretti Company has a single product called a Dak. The company normally produces and sells 87,000 Daks each year at a selling price of $60 per unit. The company's unit costs at this level of activity are given below: Direct materials $ 6.50 Direct labor 11.00 Variable manufacturing overhead 2.00 Fixed manufacturing overhead 9.00 ($783,000 total) Variable selling expenses 3.70 Fixed selling expenses 3.50 ($304,500 total) Total cost per unit $35-70 ' A number ofquestions 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 121,300 Daks each year without any increase in xed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 87,000 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 xed selling expenses? 1-b. Would the additional investment bejustied? 2. Assume again that Andretti Company has sufcient capacity to produce 121,800 Daks each year. A customer in a foreign market wants to purchase 34,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $20,830 for permits and licenses. The only selling costs that would be associated with the order would be $2.30 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 gure 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, xed manufacturing overhead costs would continue at 30% of their normal level during the two-month period and the xed 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 xed cost will the company avoid if it closes the plant for two months? c. What is the nancial 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 37,000 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, xed 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 thls question by enterlng your answers In the tabs below. Req 4A to 4C Assume again that Andretti Company has sufcient capacity to produce 121,800 Daks each year. A customer in a foreign market wants to purchase 34,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $20,880 for permits and licenses. The only selling costs that would be associated with the order would be $2.30 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places.) Show IessA Andretti Company has a single product called a Dak. The company normally produces and sells 87,000 Daks each year at a selling price of $60 per unit. The company's unit costs at this level of activity are given below: Direct materials $ 6.50 Direct labor 11.00 Variable manufacturing overhead 2.00 Fixed manufacturing overhead 9.00 ($783,000 total) Variable selling expenses 3.70 Fixed selling expenses 3.50 ($304,500 total) Total cost per unit $35-70 ' A number ofquestions 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 121,300 Daks each year without any increase in xed manufacturing overhead costs. The company could increase its unit sales by 40% above the present 87,000 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 xed selling expenses? 1-b. Would the additional investment bejustied? 2. Assume again that Andretti Company has sufcient capacity to produce 121,800 Daks each year. A customer in a foreign market wants to purchase 34,800 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $20,830 for permits and licenses. The only selling costs that would be associated with the order would be $2.30 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 gure 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, xed manufacturing overhead costs would continue at 30% of their normal level during the two-month period and the xed 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 xed cost will the company avoid if it closes the plant for two months? c. What is the nancial 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 37,000 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, xed 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 thls question by enterlng your answers In the tabs below. 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.) Complete this question by entering your answers In the tabs below. Due to a strike In its supplier's plant, Andrettl Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andrettl Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an altematlve, Andrettl could close its plant down entirely for the two months. If the plant were closed, xed manufacturing overhead cosls would continue at 30% of their normal level during the two-month 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 nal answers to 2 decimal places. Any losses/reductions should be indicated by a minus sign.) a. How much total contribution margin will Andrettl 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 nancial advantage (disadvantage) of closing the plant for the two-month period? Show IessA ...m. ....-. ~............. ....3... ... ...\"s... .-.\"- .. .. -.-...- ..._ r"""' .... ...- ........-- b. How much total xed cost will the company avoid if it closes the plant for two months? c. What is the nancial 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 87,000 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, xed 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 thls 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 altemative, Andretti could close its plant down entirely for the two months. If the plant were closed, xed manufacturing overhead cosls would continue at 30% of their normal level during the two-month period and the xed selling expenses would be reduced by 20% during the two-month period. Should Andretti close the plant for two months? Show IessA ICUULCU Ll, LUID UHIIIIB ll I: lVVU'IIIUIILII HUI IUIJ. 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 nancial 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 87,000 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, xed 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 thls question by enterlng your answers In the tabs below. An outside manufacturer has offered to produce 87,000 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, xed 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 IessA
