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All required answers are highlighted in yellow: Solution: 1)a Incremental Contribution Margin (81000*25%)"(56-8.50-10-3.20-2.70- Less: Incremental fixed selling expense Incremental net operating income (Financial Advantage) 639900 130000 509900 b) Yes Because, it will increase the net income by $509900 $21.70 1.70 0.50 1.70 $25.60 2) Variable manufacturing cost per unit Import duty per unit Permit and licences Shipping cost per unit Break even point per unit (8.50+10+3.20) (10125/20250) 3) Relvent Unit cost Since, these units are obsoleted, in this case relvent unit cost will be equal to the variable selling cost per unit. All other cost will be deemed as sunk cost. 2.70
4) Particulars a) Forgon Contribution Margin (3375 31.60) b) Total Avoidable fixed cost: Amount not rounded 106650.00 Fixed Manufacturing overhead cost (729000/12*2)*65% Fixed Selling cost (324000/12*2)*20% Total Avoidable fixed cost $78,975.00 $10,800.00 $ 89,775.00 $ -16,875.00 c) Financial Advantage Working note Contribution margin per unit (Sales - Variable costs) 31.60 56- (8.50+10+3.20+2.70) Sales units for two months (81000/12)*2- 25% of normal level (13500*25%) 13500 3375 d) No Because it will generate a financial disadvantage 5) Particulars Amount $21.70 2.70 0.90 $25.30 Variable Manufacturing costs (8.50+10+3.20) Fixed Manufacturing overhead (729000/81000°30% Variable Selling Expense (2.70/3) Avoidable cost per unit
Andretti Company has a single product called a Dak. The company normally produces and sells 81,000...
Andretti Company has a single product called a Dak. The company normally produces and sells 81,000 Daks each year at a selling price of $62 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 8.50 11.00 2.60 4.00 ($324,000 total) 4.70 4.00 ($324,000 total) $ 34.80 A number of questions relating to the production...
Andretti Company has a single product called a Dak. The company normally produces and sells 81,000 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 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 9.50 10.00 3.60 3.00 ($243,000 total) 3.70 3.00 ($243,000 total) $32.80 A number of questions relating to the production and...
Andretti Company has a single product called a Dak. The company normally produces and sells 81,000 Daks each year at a selling price of $58 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 6.50 9.00 2.70 8.00 ($648,000 total) 2.70 2.50 ($202,500 total) $31.40 A number of questions relating to the production and...
Andretti Company has a single product called a Dak. The company normally produces and sells 81,000 Daks each year at a selling price of $42 per unit. The company’s unit costs at this level of activity are given below: Direct materials $ 7.50 Direct labor 12.00 Variable manufacturing overhead 2.10 Fixed manufacturing overhead 9.00 ($729,000 total) Variable selling expenses 3.70 Fixed selling expenses 5.50 ($445,500 total) Total cost per unit $ 39.80 A number of questions relating to the production...
Andretti Company has a single product called a Dak. The company normally produces and sells 81,000 Daks each year at a selling price of $64 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 7.50 9.00 3.30 10.00 ($810,000 total) 1.70 4.00 ($324,000 total) $35.50 A number of questions relating to the production and...
Andretti Company has a single product called a Dak. The company normally produces and sells 81,000 Daks each year at a selling price of $62 per unit. The company's unit costs at this level of activity are given below. $ Direct materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit 8.50 9.00 3.60 4.00 (8324,000 total) 3.70 4.00 (5324,000 total) $32.80 A number of questions relating to the production and...
year Andretti Company has a single product called a Dak. The company normally produces and sells 84,000 Daks each selling price of $58 per unit. The company's unit costs at this level of activity are given below: $ 7.50 ON Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit ($420,000 total) 2.50 ($210,000 total) $29.00 $29.00 A number of questions relating to the production and sale of Daks follow....
Andretti Company has a single product called a Dak. The company normally produces and sells 88,000 Daks each year at a selling price of $64 per unit. The company's unit costs at this level of activity are given below: points Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 9.50 11.00 1.80 7.00 ($616,000 total) 2.70 4.00 ($352,000 total) $36.00 eBook A number of questions relating to the...
Andretti Company has a single product called a Dak. The company normally produces and sells 85,000 Daks each year at a selling price of $62 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 7.50 9.00 2.90 7.00 ($595,000 total) 4.70 3.50 ($297,500 total) $34.60 A number of questions relating to the production and...
Andretti Company has a single product called a Dak. The company normally produces and sells 89,000 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 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 6.50 9.00 3.10 5.00 $445,000 total) 3.70 3.00 ($267,000 total) $ 30.30 A number of questions relating to the production...