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Need help with this question Cane Company manufactures two products called Alpha and Beta that sell for $135 and $95, respectively. Each product uses only
Need help with this question
Cane Company manufactures two products called Alpha and Beta that sell for $135 and $95, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 105,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 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. Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? What is the company's total amount of common fixed expenses? 3. Assume that Cane expects to produce and sell 83,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is wilting to buy 13,000 additional Alphas for a price of $92 per unit. 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 $135 and $95, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 105,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 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. Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? What is the company's total amount of common fixed expenses? 3. Assume that Cane expects to produce and sell 83,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is wilting to buy 13,000 additional Alphas for a price of $92 per unit. What is the financial advantage (disadvantage) of accepting the new customer's orderStep by Step Solution
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