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Andrem Company has a single product called a Dok. The company normally produces and sells 84.000 Daks each year at a price of $58 per unit. The company's unit costs at this level of activity are given below rata selling Direct materials $ 7.50 Direct labor 11.00 Variable manufacturing overhead 2.80 Fixed manufacturing overhead 7.00 $588,000 total) Variable selling expenses 2.70 Fixed selling expenses 2.50 (5210,000 total) Total cost per unit 5 33.50 A number of questions relating to the production and sale of Doks follow. Each question is independent Required: 1-a. Assume that Andrett Company has sufficient capacity to produce 113,400 Daks each year without any increase in fred manufacturing overhead costs. The company could increase its unit sales by 35% above the present 84,000 units each year it were willing to increase the fixed selling expenses by $100,000. What is the financial advantage (disadvantage of Investing an additionat $100,000 in fixed selling expenses? 1-b. Would the additional Investment be justified? 2. Assume again that Andretti Company has sufficient capacity to produce 113.400 Daks each you. A customer in a foreign market wants to purchase 29,400 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $370 per unit and an additional $20,580 for permits and licenses. The only selling costs that would be associated with the order would be $220 per unit shipping cost. What is the break-even price per unit on this order? 3. The company has 400 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 suppliers plant, Andrett Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andreu Company has enough material on hand to operate at 25% of normal levels for the two-mooth period. As an alternative. Andretti could close its plant down ontirely for the two months. If the plant were closed, food manufacturib overhead costs would continue at 35% of thelt normal level during the two-month period and the fred soling expenses would be reduced by 20% during the two-month period a. How much total contribution margin Will Andrett forgot closes the plant for two months? b. How much total fixed cost will the company avoid 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 84,000 Daks and ship them directly to Andretu's customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle, however, fored 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 ovoidable cost per unit that it should compare to the price quoted by the outside manufacturer