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Required information The Foundational 15 L012-2, LO12-3, LO12-4, LO12-5, L012-6] [The following information applies to the questions displayed below.] Cane Company manufactures two products called
Required information The Foundational 15 L012-2, LO12-3, LO12-4, LO12-5, L012-6] [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 127,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta $ 24 30 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit $ 40 37 24 32 29 32 $194 35 25 27 $163 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 12-1 Required 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? Alpha Beta Traceable fixed manufacturing overhead 3. Assume that Cane expects to produce and sell 97,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 27,000 additional Alphas for a price of $148 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? Financial (disadvantage) Financial advantage
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