Required information The Foundational 15 (Algo) (L011-2, LO11-3, LO11-4, LO11-5, LO11-6] [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 $ 40 33 20 28 25 28 $ 174 Beta $ 24 28 18 31 21 23 $ 145 N 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. Foundational 11-5 (Algo) 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 wil 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? 6 0 5 of 15 Required information The Foundational 15 (Algo) (L011-2, L011-3, LO11-4, LO11-5, LO11-6) [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: oped Direct materials Direct labor Variable manufacturing overhead Teaceable fixed manufacturing overhead Variable selling expenses Common ixed expenses Total cost per unit Alpha $ 40 33 20 28 25 28 $ 174 Beta $ 24 28 18 31 21 23 $ 145 int 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. inces Foundational 11-6 (Algo) 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? 705 Required information The Foundational 15 (Algo) (L011-2, LO11-3, LO11-4, LO11-5, LO11-6) [The following information applies to the questions displayed below) Cone Company manufactures two products called Alpho and Bets 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: moed Beta Alpha 5.40 33 20 28 25 20 $174 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Connon fixed expenses Total cost per unit 20 10 31 21 Book $ 145 D 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. Frances Foundational 11-7 (Algo) 7. Assume that Cane normally produces and sells 53,000 Botas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line
