Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help in answering these Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only
Please help in answering these
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: Alpha Beta $ 40 $ 24 25 14 27 17 19 $154 $126 Direct materials Direct labor Variable manufacturing overhead 29 15 Traceable fixed manufacturing overhead 25 21 24 Variable selling expenses Common fixed expenses Total cost per unit 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. 6. Assume that Cane normally produces and sells 99.000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 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 $8 per pound. The company has the capacity to annually produce 113,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta 40$ 24 25 14 27 17 19 $154 $126 Direct materials Direct labor Variable manufacturing overhead 29 15 Traceable fixed manufacturing overhead25 21 24 Variable selling expenses Common fixed expenses Total cost per unit 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. 8. Assume that Cane normally produces and sells 69,000 Betas and 89,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 13.000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 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 Alpha Betia Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit s 40 S 24 25 14 27 17 19 $154 $126 29 2s 21 24 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 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? Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw materlal 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 A1pha || Beta $ 48$ 24 25 14 Traceable fixed manufacturing overhead 2527 17 19 $154 $126 a Beta Direct materials Direct 1abor Variable manufacturing overhead 29 15 Variable selling expenses Common fixed expenses Total cost per unit 21 24 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 dollairs 10. Assume that Cane expects to produce and sell $9,000 Aphas duing the current year. A supplier has offered to manufacture and deliver 59,000 Alphas to Cane for a price of $116 per unit. What is the financial advantage (disadvantage) of buying 59,000 units from the supplier instead of making those units? 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 Beta 40 24 25 14 27 17 19 $154 $126 29 15 25 24 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. 11. How many pounds of raw material are needed to make one unit of each of the two products? Alpha Beta Pounds of raw materials per unit 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 Beta s 4 s 24 25 14 27 17 19 $154$126 29 15 25 21 24 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its c are unavoidable and have been allocated to products based on sales dollars. ommon fixed expenses 12. What contribution margin per pound of raw material is earned by each of the two products? (Round your answers to 2 decimal places.) AlphaBeta Contribution margin 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 capa units of each product. Its average cost per unit for each product at this level of activity are given below city to annually produce 113,000 AlphaBeta $40$ 24 25 14 27 17 A9 Direct materials Direct labor Variable manufacturing overhead 29 15 Traceable fixed manufacturing overhead25 Variable selling expenses Common fixed expenses Total cost per unit 21 24 154$126 The company considers its traceable fixed manufacturing overhead to be avoidable, are unavoidable and have been allocated to products based on sales dollars whereas its common fixed expenses 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 pr profits? oduce to maximize its 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 A1pha1Beta Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit s40 $ 24 25 14 27 17 2419 $154 $126 29 25 21 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. 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 avallable for production is limited to 220,000 pounds. What total contribution margin will it earn? Cane Company manufactures two products called Alpha and Beta that sellfor $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 Beta S 40S 24 25 14 27 17 19 $154$126 29 15 25 21 24 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fix are unavoldable and have been allocated to products based on sales dollars. 15. Assume that Cane's customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta. Also a material available for production is limited to 220,000 pounds. If Cane uses its 220,000 pounds of raw material ould it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.) s, up to how much sh Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started