QUALITATIVE QUESTIONS (10 POINTS Use the following to answer questions 1-2: CHAVEZ Corporation (10 points) CHAVEZ Corporation produces three products: Alpha, Beta and Delta. The following unit information is available: 3. Consider the following statement: Alpha Beta Delta $ 60 $ 90 $ 80 "Full cost information provides managers with the most accurate information for making short-term decisions Selling price Do you agree or disagree, AND WHY? Justify your position. Variable costs: Direct materials Direct labor Variable overhead Total variable costs Contribution margin Contribution margin ratia 27 12 3 42 18 5 30% 14 32 8 54 36 $ 40 16 4 $ GO 20 25% 40% Hour required per unit 1.5 4 2 The direct labor rate is averages $8 per hour. Based on current staffing, a maximum of 3,000 direct labor hours are available each month. 4. Consider the following statement: A suspicious fire has bumed down the factor of their biggest competitor. As a result, they are experiencing large demand which is WAY bigger than their current capacity. They need to know which product to focus on next month of the various ways of classifying costs, the most important is by behavior - whether costs are fixed or varlable" Do you agree or disagree, AND WHY? Justify your position. 1. Which orders would you recommend that the company work on next month-orders for Alpha, Beta or Delta? Show all computations. Alpha, Bela or Delta 2. NOW ASSUME that the current market demand for Alpha is 1,000 units. In this case, how many BETA should they manufacture? COMPUTATION AREA units Page 1 Page 2