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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 selling price of $44 per unit. The companys unit costs at this level of activity are given below:

Direct materials	$	8.50
Direct labor		11.00
Variable manufacturing overhead		2.20
Fixed manufacturing overhead		6.00	($492,000 total)
Variable selling expenses		4.70
Fixed selling expenses		4.50	($369,000 total)
Total cost per unit	$	36.90

A number of questions 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 98,400 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 20% above the present 82,000 units each year if it were willing to increase the fixed selling expenses by $130,000. Calculate the incremental net operating income. (Round all dollar amounts to 2 decimal places.) Increased sales in units Contribution margin per unit Incremental contribution margin Less added fixed selling expense Incremental net operating income

1-b.	Would the increased fixed selling expenses be justified?
	No Yes

2.

Assume again that Andretti Company has sufficient capacity to produce 98,400 Daks each year. A customer in a foreign market wants to purchase 16,400 Daks. Import duties on the Daks would be $2.70 per unit, and costs for permits and licenses would be $14,760. The only selling costs that would be associated with the order would be $1.50 per unit shipping cost. Compute the per unit break-even price on this order. (Round your answers to 2 decimal places.) Variable manufacturing cost per unit Import duties per unit Permits and licenses Shipping cost per unit Break-even price per unit

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