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Required information Skip to question [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell
Required information Skip to question [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $135 and $95, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 105,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 30 $ 18 Direct labor 23 16 Variable manufacturing overhead 10 8 Traceable fixed manufacturing overhead 19 21 Variable selling expenses 15 11 Common fixed expenses 18 13 Total cost per unit $ 115 $ 87 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. 4. Assume that Cane expects to produce and sell 93,000 Betas during the current year. One of Canes sales representatives has found a new customer who is willing to buy 4,000 additional Betas for a price of $42 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order
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