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all one big question, please answer all for a like 13. Assume that Cane's customers would buy a maximum of 98,000 units of Alpha and
all one big question, please answer all for a like
13. Assume that Cane's customers would buy a maximum of 98,000 units of Alpha and 78,000 units of Beta. Also assume that the raw material available for production is limited to 248,000 pounds. How many units of each product should Cane produce to maximize its profits? Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? 7. Assume that Cane normally produces and sells 58,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 3. Assume that Cane expects to produce and sell 98,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 28,000 additional Alphas for a price of $152 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? 4. Assume that Cane expects to produce and sell 108,000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 3,000 additional Betas for a price of $81 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? 8. Assume that Cane normally produces and sells 78,000 Betas and 98,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 11,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line? The Foundational 15 (Algo) [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6] [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $210 and $172, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 128,000 units of each product. Its average cost per unit for each product at this level of activity are given below: The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 2. What is the company's total amount of common fixed expenses? 6. Assume that Cane normally produces and sells 108,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 9. Assume that Cane expects to produce and sell 98,000 Alphas during the current year. A supplier has offered to manufacture and deliver 98,000 Alphas to Cane for a price of $152 per unit. What is the financial advantage (disadvantage) of buying 98,000 units from the supplier instead of making those units? 14. Assume that Cane's customers would buy a maximum of 98,000 units of Alpha and 78,000 units of Beta. Also assume that the raw material available for production is limited to 248,000 pounds. What is the total contribution margin Cane Company will earn? 5. Assume that Cane expects to produce and sell 113,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 28,000 additional Alphas for a price of $152 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 13,000 units. a. What is the financial advantage (disadvantage) of accepting the new customer's order? b. Based on your calculations above should the special order be accepted? Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) of accepting the new customer's order? 10. Assume that Cane expects to produce and sell 73,000 Alphas during the current year. A supplier has offered to manufacture and deliver 73,000 Alphas to Cane for a price of $152 per unit. What is the financial advantage (disadvantage) of buying 73,000 units from the supplier instead of making those units? 11. How many pounds of raw material are needed to make one unit of each of the two products? 15. Assume that Cane's customers would buy a maximum of 98,000 units of Alpha and 78,000 units of Beta. Also assume that the company's raw material available for production is limited to 248,000 pounds. If Cane uses its 248,000 pounds of raw materials, up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.) 12. What contribution margin per pound of raw material is earned by each of the two products? (Round your answers to 2 decimal places.) Step by Step Solution
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