Problem 7-18 Relevant Cost Analysis in a Variety of Situations [LO 7-2, LO 7-3, LO 7-4]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 $46 per unit. The company's unit costs at this level of activity are givenbelow:2$11.001.905.00 ($405,000 total)4.705.50 ($445,500 total)$ 35.60Direct materials7.50Direct laborVariable manufacturing overheadFixed manufacturing overheadVariable selling expensesFixed selling expensesTotal cost per unitA number of questions relating to the production and sale of Daks follow. Each question is independent. 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 throughregular distribution channels. What unit cost figure is relevant for setting a minimum selling price? (Round your answer to 2 decimal places.)Relevant unit costper unit4. 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 onhand 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 costswould continue at 40% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20%. What would be the impact on profits of closing the plant for the two-monthperiod? (Any losses should be indicated by a minus sign. Round all calculations (intermediate and final) to whole numbers. Round unit calculations to whole numbers.)Contribution margin lostFixed costsFixed manufacturing overhead costFixed selling costNet advantage (disadvantage) of closing the plant$

Relevant cost is variable selling cost per unit

Problem 7-18 Relevant Cost Analysis in a Variety of Situations [LO 7-2, LO 7-3, LO 7-4] 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 $46 per unit. The company's unit costs at t below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit 2$ 7,50 11.00 1.90 5.00 ($405,000 total) 4.70 5.50 ($445,500 total) $ 35.60 A number of questions relating to the production and sale of Daks follow. Each question is independent.

Problem 7-18 Relevant Cost Analysis in a Variety of Situations [LO 7-2, LO 7-3, LO 7-4] 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 $46 per unit. The company's unit costs at t below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit 2$ 7,50 11.00 1.90 5.00 ($405,000 total) 4.70 5.50 ($445,500 total) $ 35.60 A number of questions relating to the production and sale of Daks follow. Each question is independent.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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