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! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for
! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 131,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Direct materials Alpha $ 35 Beta $ 15 Direct labor 48 23 Variable manufacturing overhead 27 25 Traceable fixed manufacturing overhead Variable selling expenses 35 38 32 28 Common fixed expenses 35 30 Total cost per unit $ 212 $ 159 The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 9. Assume Cane expects to produce and sell 100,000 Alphas during the current year. A supplier offered to manufacture and deliver 100,000 Alphas to Cane for a price of $160 per unit. What is the financial advantage (disadvantage) of buying 100,000 units from the supplier instead of making those units?
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