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Thank you Unit Price ALPHA $120 BETA $80 Average cost per unit at 100,000 units Variable Cost per Unit: Manufacturing Direct Materials Direct Labor Variable
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Unit Price ALPHA $120 BETA $80 Average cost per unit at 100,000 units Variable Cost per Unit: Manufacturing Direct Materials Direct Labor Variable manufacturing overhead Variable Selling expenses Total Variable Cost per Unit $30 $20 $7 $12 $69 $12 $15 $5 $8 $40 Traceable fixed manufacturing overhead Common fixed expenses (allocated on sales dollars) $16 $15 $18 $10 Total cost per unit $100 $68 The company can produce 100,000 of each product in the current year. 1. What is the total amount of traceable fixed manufacturing cost for each product? 2. What is the company's total amount of common fixed expense? 3. Assume that the company expects to sell 85,000 Alphas during the current year. One of the company's customers has offered to buy an additional 10,000 units at a price of $85 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? 4. Assume that the company expects to sell 85,000 Betas during the current year. One of the company's customers has offered to buy an additional 5,000 units at a price of $49 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? 5. Assuming that the company normally produces 85,000 Betas per year. What is the financial advantage/disadvantage of discontinuing the Beta product line? 6. Assuming that the company normally produces 45,000 Betas per year. What is the financial advantage/disadvantage of discontinuing the Beta product line? 7. Assume that the company expects to produce and sell 85,000 Alphas during the current year. A supplier has offered to manufacture and deliver 85,000 Alphas at a price of $85 per unit. What is the financial advantage (disadvantage) of buying 85,000 units from the supplier instead of making the units? 8. Assume that the company expects to produce and sell 45,000 Alphas during the current year. A supplier has offered to manufacture and deliver 45,000 Alphas at a price of $75 per unit. What is the financial advantage (disadvantage) of buying 45,000 units from the supplier instead of making the units Step by Step Solution
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