Cane Company manufactures two products called Alpha and Beta that sell for $140 and $100, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 106,000 units of each product. Its average cost per unit for each product at this level of activity are given below:

	Alpha				Beta
Direct materials		$	32			$	16
Direct labor			24				19
Variable manufacturing overhead			10				9
Traceable fixed manufacturing overhead			20				22
Variable selling expenses			16				12
Common fixed expenses			19				14
Total cost per unit		$	121			$	92

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.

Required:

1a. What is the total amount of traceable fixed manufacturing overhead for each of the two products?

1b.What is the companys total amount of common fixed expenses?

1c. Assume that Cane expects to produce and sell 84,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 14,000 additional Alphas for a price of $96 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order?

1d. Assume that Cane expects to produce and sell 94,000 Betas during the current year. One of Canes sales representatives has found a new customer who is willing to buy 5,000 additional Betas for a price of $43 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order?

1e. Assume that Cane expects to produce and sell 99,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 14,000 additional Alphas for a price of $96 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 7,000 units.

a. What is the financial advantage (disadvantage) of accepting the new customers order?

b. Based on your calculations above should the special order be accepted?