Required Information [The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101.000 units of each product. Its average cost per unit for each product at this level of activity are given below. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha Beta $ 30 $12 21 20 8 6 17 19 13 9 16 11 $105 $77 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. Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? Alpha Beta Traceable foed manufacturing overhead 7 Required Information [The following information applies to the questions displayed below.) Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101.000 units of each product. Its average cost per unit for each product at this level of activity are given below. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 21 8 17 13 16 $105 Beta $12 20 6 19 9 11 $27 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. 2 What is the company's total amount of common fixed expenses? Total common foced expenses I ! Required Information [The following information applies to the questions displayed below.) Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101.000 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 $12 Direct labor 21 20 Variable manufacturing overhead 8 6 Traceable fixed manufacturing overhead 17 19 Variable selling expenses 13 Common fixed expenses 16 11 Total cost per unit $105 $27 19 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fived expenses are unavoidable and have been allocated to products based on sales dollars. 3. Assume that Cane expects to produce and sell 81,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 11.000 additional Alphas for a price of $84 per unit What is the financial advantage (disadvantage) of accepting the new customer's order? Financial (disadvantage) Financial advantage Required Information The following information applies to the questions displayed below) Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 21 8 17 13 16 $105 Beta $12 28 6 19 9 11 $77 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 91.000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 6.000 additional Betas for a price of $40 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? Financial (disadvantage) Financial advantage Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101.000 units of each product. Its average cost per unit for each product at this level of activity are given below. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 21 B 17 13 16 $105 Beta $12 20 6 19 9 11 $77 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. 5. Assume that Cane expects to produce and sell 96,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 11.000 additional Alphas for a price of $84 per unit however pursuing this opportunity will decrease Alpha sales to regular customers by 6.000 units. 3. What is the financial advantage (disadvantage of accepting the new customer's order? b. Based on your calculations above should the special order be accepted? Complete this question by entering your answers in the tabs below. Red B RG 50 Based on your calculation in reg. Sa should the special order be accepted? Yes NO
