Question
Hello, I need help with these 4 questions. I have the material needed to answer them attached. QUESTIONS Assume that Cane expects to produce and
Hello, I need help with these 4 questions. I have the material needed to answer them attached.
QUESTIONS
Assume that Cane expects to produce and sell 92,000 Betas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 2,000 additional Betas for a price of $41 per unit. If Cane accepts the customer's offer, how much will its profits increase or decrease?
Assume that Cane expects to produce and sell 97,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 12,000 additional Alphas for a price of $88 per unit. If Cane accepts the customer's offer, it will decrease Alpha sales to regular customers by 7,000 units.
Assume that Cane normally produces and sells 92,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?
Assume that Cane normally produces and sells 42,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?
INFORMATION NEEDED: 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 unit costs for each product at this level of activity are given below: Alpha Dire ct materi als Dire ct labor Varia ble manuf acturi ng overh ead Trac eable fixed manuf acturi ng overh ead Varia ble sellin g expen ses Com mon fixed expen ses Total cost per unit $ $ Beta 25 $ 10 22 21 17 7 18 20 14 10 17 12 113 $ 80 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. QUESTIONS Assume that Cane expects to produce and sell 92,000 Betas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 2,000 additional Betas for a price of $41 per unit. If Cane accepts the customer's offer, how much will its profits increase or decrease? Assume that Cane expects to produce and sell 97,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 12,000 additional Alphas for a price of $88 per unit. If Cane accepts the customer's offer, it will decrease Alpha sales to regular customers by 7,000 units. Assume that Cane normally produces and sells 92,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease? Assume that Cane normally produces and sells 42,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decreaseStep by Step Solution
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