Foundational 11-5 5. 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 15,000 additional Alphas for a price of $100 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 8,000 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. Reg SA Reg 58 What is the nancial advantage (disadvantage of accepting the new customer's order? NA Req5B > 5. Assume that Cane expects to produce and sell 100,000 Alphas during the current year. One of Cane's sales represe found a new customer who is willing to buy 15,000 additional Alphas for a price of $100 per unit; however pursuing this will decrease Alpha sales to regular customers by 8,000 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 5B Based on your calculations in req. 5a should the special order be accepted? 10Yes ONO Required information The Foundational 15 [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 $150 and $105, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 107,000 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 $ 30 25 12 21 17 20 $125 Bata $10 20 10 23 13 15 $91 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 11-6 6. Assume that Cane normally produces and sells 95,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? ! Required information The Foundational 15 (L011-2, 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 $150 and $105, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 107,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Direct materiale Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 25 12 21 17 20 $125 Beta $10 20 10 23 13 15 $91 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 11-7 7. Assume that Cane normally produces and sells 45,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 15 Required information The Foundational 15 (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 $150 and 5105, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 107.000 units of each product. Its average cost per unit for each product at this level of activity are given below. Alpha Beta 010 Direct materials Direct Labor Variable manufacturing overhead Teaceable fixed manufacturing overhead Variable selling expenses Common find expenses Total cost per unit $ 30 25 12 21 17 20 $125 20 10 23 13 15 $91 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common foed expenses are unavoidable and have been allocated to products based on sales dollars. Foundational 11-8 8. Assume that Cane normally produces and sells 65,000 Botos and 85,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 20,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line? Required information The Foundational 15 (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 $150 and $105, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 107.000 units of each product. Its average cost per unit for each product at this level of activity are given below. Alpha Beta $10 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Connon fixed expenses Total cost per unit $ 30 25 12 21 17 20 $125 20 10 23 13 15 $91 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 11-9 9. Assume that Cane expects to produce and sell 85,000 Alphas during the current year. A supplier has offered to manufacture and deliver 85,000 Alphas to Cane for a price of $100 per unit. What is the financial advantage (disadvantage) of buying 85,000 units from the supplier instead of making those units
