Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively Each product uses only one type of raw material that costs $5 per pound The company has the capacity to annually produce 131,000 units of each product Its average cost per unit for each product at this level of activity are given below Alpha Beta Direct materials $ 35 $ 15 Direct labor 48 23 Variable manufacturing overhead 27 25 Traceable fixed manufacturing overhead 35 38 Variable selling expenses 1 What is the total amount of traceable fixed manufacturing overhead for each of the two products 2 What is the companys total amount of common fixed expenses 3 Assume that Cane expects to produce and sell 100,000 Alphas during the current year One of Cane's sales representatives has found a new customer who is willing to buy 30,000 additional Alphas for a price of $160 per unit What is the financial advantage (disadvantage) of accepting the new customer's order 4 Assume that Cane expects to produce and sell 110,000 Betas during the current year One of Cane's sales representatives has found a new customer who is willing to buy 2,000 additional Betas for a price of $83 per unit What is the financial advantage (disadvantage) of accepting the new customer's order 8 Assume that Cane normally produces and sells 80,000 Betas and 100,000 Alphas per year If Cane discontinues the Beta production line, its sales representatives could inscrease sales of Alpha by 13,000 units What is the financial advantage (disadvantage) of discontinuing the Beta product product line Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively Each product uses only one type of raw material that costs $5 per pound The company has the capacity to annually produce 131,000 units of each product Its average cost per unit for each product at this level of activity are given below Alpha Beta Direct materials $ 35 $ 15 Direct labor 48 23 Variable manufacturing overhead 27 25 Traceable fixed manufacturing overhead 35 38 Variable selling expenses 32 28 Common fixed expenses 35 30 Total cost per unit $ 212 $ 159 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 1 What is the total amount of traceable fixed manufacturing overhead for each of the two products 2 What is the companys total amount of common fixed expenses 3 Assume that Cane expects to produce and sell 100,000 Alphas during the current year One of Cane's sales representatives has found a new customer who is willing to buy 30,000 additional Alphas for a price of $160 per unit What is the financial advantage (disadvantage) of accepting the new customer's order 4 Assume that Cane expects to produce and sell 110,000 Betas during the current year One of Canes sales representatives has found a new customer who is willing to buy 2,000 additional Betas for a price of $83 per unit What is the financial advantage (disadvantage) of accepting the new customer's order 5 Assume that Cane expects to produce and sell 115,000 Alphas during the current year One of Cane's sales representatives has found a new customer who is willing to buy 30,000 additional Alphas for a price of $160 per unit however pursuing this opportunity will decrease Alpha sales to regular customers by 14,000 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 8 Assume that Cane normally produces and sells 80,000 Betas and 100,000 Alphas per year If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 13,000 units What is the financial advantage (disadvantage) of discontinuing the Beta product line

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Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively. Each product uses only one type of raw material

Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 131,000 units of each product. Its average cost per unit for each product at this level of activity are given below:

	Alpha	Beta
Direct materials	$ 35	$ 15
Direct labor	48	23
Variable manufacturing overhead	27	25
Traceable fixed manufacturing overhead	35	38
Variable selling expenses 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? 2.What is the companys total amount of common fixed expenses? 3. Assume that Cane expects to produce and sell 100,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 30,000 additional Alphas for a price of $160 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? 4. Assume that Cane expects to produce and sell 110,000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 2,000 additional Betas for a price of $83 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? 8. Assume that Cane normally produces and sells 80,000 Betas and 100,000 Alphas per year. If Cane discontinues the Beta production line, its sales representatives could inscrease sales of Alpha by 13,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product product line?

	Alpha	Beta
Direct materials	$ 35	$ 15
Direct labor	48	23
Variable manufacturing overhead	27	25
Traceable fixed manufacturing overhead	35	38
Variable selling expenses	32	28
Common fixed expenses	35	30
Total cost per unit	$ 212	$ 159

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.

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

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

3. Assume that Cane expects to produce and sell 100,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 30,000 additional Alphas for a price of $160 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order?

4. Assume that Cane expects to produce and sell 110,000 Betas during the current year. One of Canes sales representatives has found a new customer who is willing to buy 2,000 additional Betas for a price of $83 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order?

5. Assume that Cane expects to produce and sell 115,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 30,000 additional Alphas for a price of $160 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 14,000 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?

8. Assume that Cane normally produces and sells 80,000 Betas and 100,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 13,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line?