Required information [The following information applies to the questions displayed below.) Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102.000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Data Direct materials $ 25 Direct labor 22 Variable manutacturing overhead 17 Traceable fixed manufacturing overhead 10 Variable selling expenses Common fixed expenses Total cost per unit $10 21 2 20 LO 12 980 17 $113 The company considers its trpceable 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 97000 Alphas during the current year. One of Cane's sales representativos has found a new customer who is willing to buy 12,000 additional Alphas for a price of $88 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 7000 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? art 5 of 15 5. Assume that Cane expects to produce and sell 97000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 12,000 additional Aiphas for a price of $88 per unit; however pursuing this opportunity wil decrease Alpha sales to regular customers by 7000 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? 55 Answer is not complete Complete this question by entering your answers in the tabs below. Rec SA Regs What is the financial advantage (tiadvantage of accepting the new customer's order Reg 5 > 6. Assume that Cane normally produces and sells 92,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 7. Assume that Cane normally produces and sells 42,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 9. Assume that Cane expects to produce and sell 82,000 Alphas during the current year. A supplier has offered to manufacture and dellver 32,000 Alphas to Cane for a price of $88 per unit. What is the financial advantage (disadvantages of buying 82,000 units from the supplier instead of making those units? 10. Assume that Cane expects to produce and sell 52,000 Alphas during the current year. A supplier has offered to manufacture and deliver 52,000 Alphas to Cane for a price of $88 per unit. What is the financial advantage (disadvantage) of buying 52.000 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? Alpha Beta Pounds of raw materials per unit 12. What contribution margin per pound of raw material is earned by each of the two products? (Round your answers to 2 decimal places.) Alpha Beta Contribution margin per pound 13. Assume that Cane's customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the raw material available for production is limited to 162.000 pounds. How many units of each product should Cane produce to maximize its profits? Alpha Units produced 14. Assume that Cane's customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the raw material available for production is limited to 162,000 pounds. What is the total contribution margin Cane Company will earn? Tot contribution margin 15. Assume that Cane's customers would buy a maximum of 82.000 units of Alpha and 62,000 units of Beta. Also assume that the company's raw material available for production is limited to 162,000 pounds. If Cane uses its 162,000 pounds of raw materials, up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.) Maimum price to be paid per pound
