Cane Company manufactures two products called Alpha and Beta that sell for $$215$ and $$160,$ respectively. Each product uses only one type of raw material that costs $$7$ per pound. The company has the capacity to annually produce $125,000$ units of each product. Its average cost per unit for each product at this level of activity is given below:

Alpha Beta

Direct materials $ $42$ $ $21$

Direct labor $3528$

Variable manufacturing overhead $2321$

Traceable fixed manufacturing overhead $3134$

Variable selling expenses $2824$

Common fixed expenses $3126$

Total cost per unit $ $190$ $ $154$

The company$$s traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars.

$10.$ Assume Cane expects to produce and sell $71,000$ Alphas during the current year. A supplier offered to manufacture and deliver $71,000$ Alphas to Cane for a price of $$144$ per unit. What is the financial advantage $($disadvantage$)$ of buying $71,000$ units from the supplier instead of making those units? Cane Company manufactures two products called Alpha and Beta that sell for $$215$ and $$160,$ respectively. Each product

uses only one type of raw material that costs $$7$ per pound. The company has the capacity to annually produce $125,000$

units of each product. Its average cost per unit for each product at this level of activity is given below:

The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are

unavoidable and have been allocated to products based on sales dollars.$\text{'}$

Assume Cane expects to produce and sell $71,000$ Alphas during the current year. A supplier offered to manufacture and deliver

$71,000$ Alphas to Cane for a price of $$144$ per unit. What is the financial advantage $($disadvantage$)$ of buying $71,000$ units from the

supplier instead of making those units?