Required information [The following information applies to the questions displayed below.) Cane Company manufactures two products called Alpha and Beta that sell for $185 and $150, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 119,000 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 540 33 20 28 25 28 $174 Beta $ 24 2 10 21 21 23 $145 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 103,000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 2,000 additional Betas for a price of $61 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? Required information [The following information applies to the questions displayed below) Cane Company manufactures two products called Alpha and Bets that sell for $185 and $150, respectively. Each product uses only one type of raw material that costs 58 per pound. The company has the capacity to annually produce 119,000 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 banufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 40 33 20 28 25 28 $174 Beta $24 28 18 31 21 $145 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 108,000 Alphas during the current year. One of Cone's sales representatives has found a new customer who is willing to buy 23,000 additional Alphas for a price of $132 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 12.000 units. a. 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? 5. Assume that Cane expects to produce and sell 108,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 23,000 additional Alphas for a price of $132 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 12.000 units. a. 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 SA Reg 58 What is the financial advantage (disadvantage of accepting the new customer's order? ReqGA Req 58 > Required information The following information applies to the questions displayed below.) Cane Company manufactures two products called Alpha and Beta that sell for $185 and $150, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 119.000 units of each product. Its average cost per unit for each product at this level of activity are given below. Alpha Bata Direct materials 5:40 $24 Direct labor Variable manufacturing overhead 20 Traceable fixed manufacturing overhead 28 Variable selling expenses 21 Connor fixed expenses Total cost per unit $114 $145 TH 31 25 28 23 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. 6. Assume that Cane normally produces and sells 103,000 Betas per year What is the financial advantage (disadvantage) of discontinuing the Beta product line
