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ces Required information The Foundational 15 (Algo) [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6] [The following information applies to the questions displayed below.] Cane Company manufactures two
ces Required information The Foundational 15 (Algo) [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6] [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct labor Direct materials Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha Beta $ 30 $12 21 20 8 6 17 19 13 16 9 11 $ 105 $77 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 91,000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 6,000 additional Betas for a price of $40 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? cest Foundational 11-5 (Algo) 5. Assume that Cane expects to produce and sell 96,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 11,000 additional Alphas for a price of $84 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 6,000 units. a. What is the financial advantage (disadvantage) of accepting the new customer's order? b. Based on your calculations above should the special order be accepted? Complete this question by entering your answers in the tabs below. Req 5A Req 58 What is the financial advantage (disadvantage) of accepting the new customer's order? Reg SA Req 5B > Foundational 11-6 (Algo) 6. Assume that Cane normally produces and sells 91,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Bet product line? Foundational 11-7 (Algo) 7. Assume that Cane normally produces and sells 41,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line
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