Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The foiiowing information appiies to the questions dismayed beiow} lCane Company manufactures two products called Alpha and Beta that sell for $155 and

image text in transcribedimage text in transcribedimage text in transcribed
Required information [The foiiowing information appiies to the questions dismayed beiow} lCane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 24 $ 12 Direct labor 23 25 Variable manufacturing overhead 22 12 Traceable fixed manufacturing overhead 23 25 Variable selling expenses 19 15 Common fixed expenses 22 1? Total cost per unit 5 133 5 197 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. 10. Assume that Cane expects to produce and sell 51000 Alphas during the current year. A supplier has offered to manufacture and deliver 51000 Alphas to Cane for a price of $108 per unit. What is the financial advantage {disadvantage} of buying 51000 units from the supplier instead of making those units? ::| Required information [The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 24 $ 12 Direct labor 23 26 Variable manufacturing overhead 22 12 Traceable fixed manufacturing overhead 23 25 Variable selling expenses 19 15 Common fixed expenses 22 1? Total cost per unit $ 133 $ 13? 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 ofthe two products? Pounds of raw materials per unit - - Required information [The foiiowing information appiies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of rail-ur material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 24 $ 12 Direct labor 23 26 Variable manufacturing overhead 22 12 Traceable fixed manufacturing overhead 23 25 Variable selling expenses 19 15 Common fixed expenses 22 1? Total cost per unit $ 133 $ 137 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. 12. What contribution margin per pound of raw material is earned by each of the two products? {Round your answers to 2 decimal places} Contribution margin per pound l l l

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_2

Step: 3

blur-text-image_3

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

Principles Of Accounting And Principles Of Financial Accounting

Authors: Belverd E Needles, Marian Powers, Susan V Crosson

12th Edition

1133962459, 9781133962458

More Books

Students also viewed these Accounting questions