Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of

please help

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 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 $ 40 29 15 25 21 24 Beta $ 24 25 14 27 17 19 $ 154 $ 126 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 13-13 (Algo) 13. Assume that Cane's customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta. Also assume that the raw material available for production is limited to 220,000 pounds. How many units of each product should Cane produce to maximize its profits? Alpha Beta Units produced Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 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 $ 40 29 15 25 21 24 Beta $ 24 25 14 27 17 19 $ 154 $ 126 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 13-14 (Algo) 14. Assume that Cane's customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta. Also assume that the raw material available for production is limited to 220,000 pounds. What is the total contribution margin Cane Company will earn? Total contribution margin Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Beta $ 24 25 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 40 29 15 25 21 24 14 27 17 19 $ 154 $ 126 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 13-15 (Algo) 15. Assume that Cane's customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta. Also assume that the company's raw material available for production is limited to 220,000 pounds. If Cane uses its 220,000 pounds of raw materials, up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.) Maximum price to be paid per pound Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 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 $ 40 29 15 25 21 24 Beta $ 24 25 14 27 17 19 $ 154 $ 126 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 13-9 (Algo) 9. Assume that Cane expects to produce and sell 89,000 Alphas during the current year. A supplier has offered to manufacture and deliver 89.000 Alphas to Cane for a price of $116 per unit. What is the financial advantage (disadvantage) of buying 89,000 units from the supplier instead of making those units? Financial (disadvantage)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles

Authors: Jerry J. Weygandt, Valerie A. Kinnear, Donald E. Kieso, Paul D. Kimmel, Barbara A. Trenholm, Joan E. Barlow

6th Canadian Edition

1118557301, 978-1118557303

More Books

Students also viewed these Accounting questions