Required Information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $210 and $172, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 128,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 40 $ 24 Direct labor Variable manufacturing overhead 25 Traceable fixed manufacturing overhead 36 Variable selling expenses 30 Common fixed expenses Total cost per unit $199 $171 38 34 23 33 33 26 28 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. 9. Assume that Cane expects to produce and sell 98,000 Alphas during the current year. A supplier has offered to manufacture and deliver 98.000 Alphas to Cane for a price of $152 per unit. What is the financial advantage (disadvantage) of buying 98.000 units from the supplier instead of making those units? Required Information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $210 and $172, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 128,000 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 $42 38 25 33 38 33 $199 Beta $ 24 34 23 36 26 28 $171 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. 10. Assume that Cane expects to produce and sell 73.000 Alphas during the current year. A supplier has offered to manufacture and deliver 73,000 Alphas to Cane for a price of $152 per unit. What is the financial advantage (disadvantage) of buying 73.000 units from the supplier instead of making those units? Exercise 011-2 1 2 points Juniper Design Ltd. of Manchester, England, provides design services to residential developers. Last year, the company had net operating income of $470,000 on sales of $1,400,000. The company's average operating assets for the year were $1,600,000 and its minimum required rate of return was 13%. Required: Compute the company's residual income for the year. Skipped Residual income eBook Hint Print References Exercise 011-4 1 2 points Skipped Hannibal Steel Company has a Transport Services Department that provides trucks to haul ore from the company's mine to its two steel mills-the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $323.400 per year. consisting of $0.23 per ton variable cost and $273.400 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 56% of the Transport Services Department's capacity and the Southern Plant requires 44%. During the year, the Transport Services Department actually hauled 127.000 tons of ore to the Northern Plant and 65.900 tons to the Southern Plant. The Transport Services Department incurred $365.000 in cost during the year, of which $53.900 was variable cost and $311.100 was fixed cost. Required: 1. How much of the Transport Services Department's variable costs should be charged to each plant? 2 How much of the $311,100 in fixed cost should be charged to each plant? 3. Should any of the Transport Services Department's actual total cost of $365,000 be treated as a spending variance and not charged to the plants? eBook Print Complete this question by entering your answers in the tabs below. References Required 1 Required 2 Required 3 How much of the Transport Services Department's variable costs should be charged to each plant? Variable cost charged to Northern Plant Variable cost charged to Southern Plant