Cane Company manufactures two products called Alpha and Beta that sell for $190 and $155, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 122,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Alpha Beta $ 40 $ 24 Direct labor 34 Variable manufacturing overhead 28 21 19 Traceable fixed manufacturing overhead 29 32 Variable selling expenses 26 22 Common fixed expenses 29 24 Total cost per unit $ 179 $ 149 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 11-1 (Algo) Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? Alpha Bata Traceable fixed manufacturing overhead Cane Company manufactures two products called Alpha and Beta that sell for $190 and $155, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 122,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 40 $ 24 Direct labor 34 28 Variable manufacturing overhead 22 19 Traceable fixed manufacturing overhead 32 Variable selling expenses 22 Common fixed expenses 29 24 Total cost per unit $ 179 $ 149 29 25 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? Tommons Cane Company manufactures two products called Alpha and Beta that sell for $190 and 5155, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 122,000 units of each product. Its average cost per unit for each product at this level of activity are given below Alpha Beta Direct materials $ 40 $ 24 Direct labor 34 28 Variable manufacturing overhead 2119 Traceable fixed manufacturing overhead 29 32 Variable selling expenses 26 22 Common fixed expenses 29 24 Total cost per unit $ 1795 149 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 Cane expects to produce and sell 94,000 Alphas during the current you, One of Cane's sales representatives has found a new customer who is willing to buy 24,000 additional Alphas for a price of $136 perunt 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 $190 and $155, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 122,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Direct materials Beta $40 $ 24 Direct labor 34 28 Variable manufacturing overhead 21 19 Traceable fixed manufacturing overhead 29 32 Variable selling expenses 26 22 Common fixed expenses 29 24 Total cost per unit $ 179 $ 149 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 11-4 (Algo) 4. Assume that Cane expects to produce and sell 104.000 Betas during the current year. One of Can's sales representatives has found a new customer who is willing to buy 3,000 additional Betas for a price of $62 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order
