ayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 127,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Alpha $ 40 Beta $ 24 Direct labor 37 30 Variable manufacturing overhead 24 22 Traceable fixed manufacturing overhead Variable selling expenses 32 35 29 25 Common fixed expenses 32 27 Total cost per unit $194 $163 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. 5. Assume that Cane expects to produce and sell 112,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 27,000 additional Alphas for a price of $148 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 12,000 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? Required information. [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 127,000 units of each product. Its average cost per unit for each product at this level of activity are given below: ufa hre Alpha Beta Direct materials $ 40 $24 Direct labor 37 30 Variable manufacturing overhead 24 22 Traceable fixed manufacturing overhead 32 35 Variable selling expenses 29 25 Common fixed expenses 32 Total cost per unit $194 27 $163 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. 6. Assume that Cane normally produces and sells 107,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? Raw les 45 enses 100 20 infinew 22.300 ales de its a jent us inancial ductions ment the it lines Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 127,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Alpha Beta Direct materials $ 40 $24 Direct labor 37 $30 Variable manufacturing overhead 24 22 Traceable fixed manufacturing overhead 32 35 Variable selling expenses 29 25 Common fixed expenses 32 27 Total cost per unit $194 $163 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. 7. Assume that Cane normally produces and sells 57,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 127,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Alpha $ 40 Beta $ 24 Direct labor 37 30 Variable manufacturing overhead 24 22 Traceable fixed manufacturing overhead 32 35 Variable selling expenses 29 25 Common fixed expenses, 32 27 Total cost per unit $194 $163 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. 8. Assume that Cane normally produces and sells 77,000 Betas and 97,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 12,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line