Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 25 22 17 18 14 17 $ 113 Beta $ 10 21 7 20 10 12 S80 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. Foundational 11-2 (Algo) 2. What is the company's total amount of common fixed expenses? Toti comando Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Direct materials Direct labor Variable manufacturing overhead Teaceable fixed manufacturing overhead Variable selling expenses Common Eised expenses Total cost per unit Alpha $ 25 22 17 18 14 17 $ 113 Beta $ 10 21 7 20 10 12 5.80 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. Foundational 11-3 (Algo) 3. Assume that one expects to produce and sell 82,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 12,000 additional Alphas for a price of $88 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Beta $ 10 21 Direct materials Direct labor Variable manufacturing overhead Teaceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cont per unit Alpha $.25 22 17 18 14 17 $ 113 20 10 12 $ 80 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses ate unavoidable and have bee allocated to products based on sales dollars. Foundational 11-6 (Algo) 6. Assume that Cane normally produces and sells 92.000 Betos per year. What is the financial advantage (disadvantage of discontinuing the Beta product line
