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Required information Cane Company manufactures two products called Alpha and Beta that sell for $ 1 3 0 and $ 9 0 , respectively. Each
Required informationCane Company
manufactures two products called Alpha and Beta that sell for $
and $ respectively. Each product uses only one type of raw
material that costs $ per pound. The company has the capacity to
annually produce units of each product. Its unit costs 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 deemed unavoidable and have been
allocated to products based on sales dollars.Assume that Cane
expects to produce and sell Alphas during the current year.
One of Cane's sales representatives has found a new customer that
is willing to buy additional Alphas for a price of $ per
unit. If Cane accepts the customers offer, how much will its
profits increase or decrease?Assume that Cane
expects to produce and sell Alphas during the current year.
One of Cane's sales representatives has found a new customer that
is willing to buy additional Alphas for a price of $ per
unit. If Cane accepts the customers offer, it will decrease Alpha
sales to regular customers by units.Calculate the
incremental net operating income if the order is accepted?
Loss amount should be indicated with a minus
sign.Assume that Cane
normally produces and sells Betas per year. If Cane
discontinues the Beta product line, how much will profits increase
or decrease?How many pounds of raw material are needed to make one unit of
Alpha and one unit of Beta?What contribution
margin per pound of raw material is earned by Alpha and Beta?
Round your answers to decimal places.Assume that Canes
customers would buy a maximum of units of Alpha and
units of Beta. Also assume that the companys raw material
available for production is limited to pounds. How many
units of each product should Cane produce to maximize its
profits?
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