Required information The Foundational 15 [LO12-2, LO12-3, L012-4, L012-5, LO12-6] [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha 23 23 Beta $ 12 26 12 25 15 17 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit $ 24 $133 $107 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 12-3 3. Assume that Cane expects to produce and sell 87,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 17000 additional Alphas for a price of $108 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? Financial advantage 5. Assume that Cane expects to produce and sell 102,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 17,000 additional Alphas for a price of $108 per unit, however pursuing this opportunity will decrease Alpha sales to regular customers by 9,000 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? Complete this question by entering your answers in the tabs below Req 5A Req 5B What is the financial advantage (disadvantage) of accepting the new customer's order? K Req 5A Req 5B 6. Assume that Cane normally produces and sells 97,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 7. Assume that Cane normally produces and sells 47,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 8. Assume that Cane normally produces and sells 67,000 Betas and 87,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 11,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 9. Assume that Cane expects to produce and sell 87,000 Alphas during the current year. A supplier has offered to manufacture and deliver 87000 Alphas to Cane for a price of $108 per unit What is the financial advantage (disadvantage) of buying 87,000 units from the supplier instead of making those units? 10. Assume that Cane expects to produce and sell 57,000 Alphas during the current year. A supplier has offered to manufacture and deliver 57000 Alphas to Cane for a price of $108 per unit. What is the financial advantage (disadvantage) of buying 57000 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 Foundational 12-12 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 14. Assume that Cane's customers would buy a maximum of 87,000 units of Alpha and 67,000 units of Beta. Also assume that the company's raw material available for production is limited to 168,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials? Total contribution margin 15. Assume that Cane's customers would buy a maximum of 87,000 units of Alpha and 67,000 units of Beta. Also assume that the company's raw material available for production is limited to 168,000 pounds. If Cane uses its 168,000 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.) Maximum price to be paid per pound Required information The Foundational 15 [LO12-2, LO12-3, L012-4, L012-5, LO12-6] [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha 23 23 Beta $ 12 26 12 25 15 17 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit $ 24 $133 $107 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 12-3 3. Assume that Cane expects to produce and sell 87,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 17000 additional Alphas for a price of $108 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? Financial advantage 5. Assume that Cane expects to produce and sell 102,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 17,000 additional Alphas for a price of $108 per unit, however pursuing this opportunity will decrease Alpha sales to regular customers by 9,000 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? Complete this question by entering your answers in the tabs below Req 5A Req 5B What is the financial advantage (disadvantage) of accepting the new customer's order? K Req 5A Req 5B 6. Assume that Cane normally produces and sells 97,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 7. Assume that Cane normally produces and sells 47,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 8. Assume that Cane normally produces and sells 67,000 Betas and 87,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 11,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line? 9. Assume that Cane expects to produce and sell 87,000 Alphas during the current year. A supplier has offered to manufacture and deliver 87000 Alphas to Cane for a price of $108 per unit What is the financial advantage (disadvantage) of buying 87,000 units from the supplier instead of making those units? 10. Assume that Cane expects to produce and sell 57,000 Alphas during the current year. A supplier has offered to manufacture and deliver 57000 Alphas to Cane for a price of $108 per unit. What is the financial advantage (disadvantage) of buying 57000 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 Foundational 12-12 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 14. Assume that Cane's customers would buy a maximum of 87,000 units of Alpha and 67,000 units of Beta. Also assume that the company's raw material available for production is limited to 168,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials? Total contribution margin 15. Assume that Cane's customers would buy a maximum of 87,000 units of Alpha and 67,000 units of Beta. Also assume that the company's raw material available for production is limited to 168,000 pounds. If Cane uses its 168,000 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.) Maximum price to be paid per pound