Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $180 and $145, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 118,000 units of each product. Its average cost per unit for each product at this level of activity is given below: 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. 1. What is the total traceable fixed manufacturing overhead for each of the two products? 2. What is the company's total common fixed expenses? 3. Assume Cane expects to produce and sell 92,000 Alphas during the current year. One of Cane's sales representatives found a new customer willing to buy 22,000 additional Alphas for a price of $128 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? 4. Assume Cane expects to produce and sell 102,000 Betas during the current year. One of Cane's sales representatives found a new customer willing to buy 4,000 additional Betas for a price of $60 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? 5. Assume Cane expects to produce and sell 107,000 Alphas during the current year. One of Cane's sales representatives found a new customer willing to buy 22,000 additional Alphas for a price of $128 per unit; however, pursuing this opportunity will decrease Alpha sales to regular customers by 11,000 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. What is the financial advantage (disadvantage) of accepting the new customer's order? 6. Assume Cane normally produces and sells 102,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 7. Assume Cane normally produces and sells 52,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 8. Assume Cane normally produces and sells 72,000 Betas and 92,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 12,000 units. What is the financlal advantage (disadvantage) of discontinuing the Beta product line? 9. Assume Cane expects to produce and sell 92,000 Alphas during the current year. A supplier offered to manufacture and dellver 92,000 Alphas to Cane for a price of $128 per unit. What is the financial advantage (disadvantage) of buying 92,000 units from the supplier instead of making those units? 10. Assume Cane expects to produce and sell 62,000 Alphas during the current year. A supplier offered to manufacture and deliver 62,000 Alphas to Cane for a price of $128 per unit. What is the financial advantage (disadvantage) of buying 62,000 units from the supplier instead of making those units? 11. How many pounds of raw material are needed to make one unit of each of the two products? 12. What contribution margin per pound of raw material is earned by each of the two products? Note: Round your answers to 2 decimal places. 13. Assume Cane's customers would buy a maximum of 92,000 units of Alpha and 72,000 units of Beta. Also assume the raw material available for production is limited to 300,000 pounds. How many units of each product should Cane produce to maximize its profits? 14. Assume Cane's customers would buy a maximum of 92,000 units of Alpha and 72,000 units of Beta. Also assume the raw material available for production is limited to 300,000 pounds. What is the total contribution margin Cane Company will earn? 15. Assume Cane's customers would buy a maximum of 92,000 units of Alpha and 72,000 units of Beta. Also assume the company's raw material avallable for production is limited to 300,000 pounds. If Cane uses its 300,000 pounds of raw materlals, up to how much should it be willing to pay per pound for additional raw materials? Note: Round your answer to 2 decimal places
