Required information The following information applies to the questions displayed below) Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Alpha 5.30 20 Bata $12 15 Direct materia Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Coman xed expenses Total cost per unit 18 16 12 15 3100 10 360 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed oxpenses are unavoidable and have been allocated to products based on sales dollars, 7. Assume that Cane normally produces and sells 40,000 Betas per year. What is the financial advantage (disadvantage of discontinuing the Beto product line? Required Information The following information applies to the questions displayed below) Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its average cost per unit for each product at this level of activity are given below: a Direct material Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 20 7 16 12 15 $100 Beta $ 12 15 5 ia 8 10 568 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed pxpenses are unavoidable and have been allocated to products based on sales dollars. 6. Assume that cane normally produces and sells 90,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? Financial (disadvantage) S (1.800,000) 1,000 Required information The following information applies to the questions displayed below) Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Det Direct materiale $ 30 512 Direct labor 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead 16 18 Variable selling expenses 12 Common fixed expenses 15 10 total cost per unit $100 $68 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 Cone expects to produce and sell 90,000 Betas during the current year One of Cone's soles representatives has found o new customer who is willing to buy 5,000 additional Betes for a price of $39 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? Financial (disadvantage) (5,000) The following information applies to the questions displayed below! Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Direct materiale Direct labor Variable manufacturing overhead Traceable Lixed manufacturing overhead Variable selling expenses Como tixed expenses Total cost per unit Alpha $ 30 20 7 16 12 15 $100 Det $12 15 5 10 10 568 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. 3. Assume that Cane expects to produce and sell 80,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 10,000 additional Alphas for a price of $80 per unit, What is the financial advantage (disadvantage) of accepting the new customer's order? Financial advantage $ 110,000
