# 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 \$40 per unit….

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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 \$40 per unit. The company’s unit costs at this level of activity are given below:

Direct materials\$9.50 Direct labor 8.00 Variable manufacturing overhead 2.40 Fixed manufacturing overhead 4.00(\$324,000 total) Variable selling expenses 3.70 Fixed selling expenses 3.50(\$283,500 total) Total cost per unit\$31.10

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 113,400 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 40% above the present 81,000 units each year if it were willing to increase the fixed selling expenses by \$110,000. Calculate the incremental net operating income. (Round your answers to the nearest whole number.)

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 \$40 per unit. The company’s unit costs at this level of activity are given below:

Direct materials\$9.50 Direct labor 8.00 Variable manufacturing overhead 2.40 Fixed manufacturing overhead 4.00(\$324,000 total) Variable selling expenses 3.70 Fixed selling expenses 3.50(\$283,500 total) Total cost per unit\$31.10

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 113,400 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 40% above the present 81,000 units each year if it were willing to increase the fixed selling expenses by \$110,000. Calculate the incremental net operating income. (Round your answers to the nearest whole number.)

Increased Sales in Units