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Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 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. Foundational 11-1 (Algo) Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? [The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 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 unavoldable 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? Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. its average cost per unit for each product at this level of activity are given below: The compony considers its traceable fixed manulacturing 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 99,000 Aphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 29.000 additional Alphas for a price of $156 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 $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Tts 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 unavoldable and have been allocated to products based on sales dollars. Foundational 11-4 (Algo) 4. Assume that Cane expects to produce and sell 109,000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 5,000 additional Betas for a price of $82 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? 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 11.5 (Algo) 5. Assume that Cane expects to produce and sell 114,000 Alphas during the current year, One of Cane's sales representatives has found a new customer who is willing to buy 29,000 additional Alphas for a price of $156 per unit: however pursuing this opportunity will decrease Alpha sales to regular customers by 13,000 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. What is the financial advantage (disadvantage) of accepting the new customer's order? 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 $225 and $175, respectively, Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 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. Foundational 11-6 (Algo) 6. Assume that Cane normally produces and sells 109.000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 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 $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of actlvity are glven 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 doliars. oundational 11-7 (Algo) Assume that Cane normally produces and sells 59,000 Betas per year. What is the financial advantage (disadvantage) of scontinuing the Beta product line? 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 $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 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 unovoldable and have been allocated to products based on sales dollars. Eoundational 11-8 (Algo) 3. Assume that Cane normally produces and selis 79,000 Betas and 99,000 Alphas per year. If Cane discontinues the Beta product ine, Its sales representatives could increase sales of Alpha by 12.000 units. What is the financial advontage (disadvantage) of discontinuing the Beta product line? 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 Compary manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 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 manufocturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Foundational 11-9 (Algo) 9. Assume that Cane expects to produce and sel 99,000 Alphas during the current year. A supplier has otfered to manufacture and deliver 99,000 Alphas to Cane for a price of $156 per unit. What is the financial advantage (disadvantage) of buying 99,000 units from the supplier instead of making those units? 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 $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 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 unavoldable and have been allocated to products based on sales dollars. Foundational 11-10(Algo) 10. Assume that Cane expects to produce and sell 74,000 Alphas during the current year. A supplier has offered to manufacture and deliver 74,000 Alphas to Cane for a price of $156 per unit. What is the financial advantage (disadvantage) of buying 74,000 units from the supplier instead of making those units? Required information The Foundational 15 (Algo) [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6] [The following information applles to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 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. Foundational 11-11 (Algo) 11. How many pounds of raw material are needed to make one unit of each of the two products? Requlred informstion The Foundational 15 (Algo) [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6] [The following information applles to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 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 unavoidoble and have been allocated to products based on sales dollars. Coundational 11-12 (Algo) 2. What contribution margin per pound of raw material is eamed by each of the two products? (Round your answers to 2 decimal Olaces.) Pequired informstion The Foundetional 15 (Algo) [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6] [The following information applies to the questians displiyed below] Cane Company manutoctures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw materisi that costs $6 per pound. The company has the capacity to annually produce 130.000 units of each product. his 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. Foundational 11-13 (Algo) 13. Assume that Cane's customers would buy a maximum of 99,000 units of Alpha and 79,000 units of Beta. Also assume that the row material avalilable for production is limited to 344,000 pounds. How many units of each product should Cane produce to maximize its profits? Cane Compary manufactures two products called Alpha and Beta that sell for $225 and $175, respectively, Each product uses only one type of rw material that costs $6 per pound. The company has the capacity to annually produce 130,000 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. Foundational 11-14 (Algo) 14. Assume that Cane's customers would buy a maximum of 99,000 units of Apha and 79,000 units of Beta. Also assume that the raw material avalibble for production is limited to 344,000 pounds. What is the total contribution margin Cane Company will earn? Required information The Foundational 15 (Algo) [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6] [The following information applies to the questions displayed befow.] Cane Compary manufactures two products called Aipha and Beta that sell for $225 and $175, respectlvely. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 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 avoidoble, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. =oundational 11-15 (Algo) 5. Assume that Cane's customers would buy a maximum of 99,000 units of Alpha and 79,000 units of Beta. Also assume that the ompany's raw material avaliable for production is limited to 344,000 pounds. If Cane uses its 344,000 pounds of raw materials, up how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)
