Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100.000 units of each product. Its unit costs for each product at this level of activity are given below Direct materials Direct labour Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Cost per unit Alphabet $ 30 $ 12 20 15 2 5 16 16 12 8 15 10 $100 5 68 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common foxed expenses are deemed unavoidable and have been allocated to products based on sales dollars. 4. Assume that Cane expects to produce and sell 90,000 Betas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 5,000 additional Betas for a price of $39 per unit if Cane accepts the customer's offer, how much will its profits increase or decrease? by Net operating income CHUSHANGIR Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its unit costs for each product at this level of activity are given below Beta Direct materials Direct labour Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Alpha $ 30 2e 7 16 12 15 $ 12 15 5 18 3 10 Cost per unit $100 $ 68 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars 5. Assume that Cane expects to produce and sell 95,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 10,000 additional Alphas for a price of $80.ber unit. If Cane accepts the customer's offer.it will decrease Alpha sales to regular customers by 5,000 units a. Calculate the incremental net operating income if the order is accepted? (Loss amount should be indicated with a minus sign) Incremental net operating income Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its unit costs for each product at this level of activity are given below Direct materials Direct labour Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Alpha Beta $ 30 $ 12 2015 7 5 16 18 12 8 15 10 Cost per unit $100 5 68 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars. ho 6. Assume that Cane normally produces and sells 90.000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease? Profit by Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its unit costs for each product at this level of activity are given below Direct materials Direct labour Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Alpha Beta $ 30 512 20 15 7 5 16 18 12 8 15 1e Cost per unit $100 $ 68 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars. 7. Assume that Cane normally produces and sells 40,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease? Profit by Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its unit costs for each product at this level of activity are given below Direct materials Direct labour Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Cost per unit Alpha Beta $30 $ 12 20 15 7 5 16 18 12 8 15 10 $100 $6 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars. 8. Assume that Cane normally produces and sells 60.000 Betas and 80,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 15.000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease? Profit by y