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[ The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $150 and $105,
[ The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $150 and $105, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 107,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 39 $ 16 Direct labor 25 26 Variable manufacturing overhead 12 16 Traceable fixed manufacturing overhead 21 23 Variable selling expenses 17 13 Common fixed expenses 26 15 Total cost per unit '30 125 $ 91 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 55,000 Alphas during the current year. A supplier has offered to manufacture and deliver 55,000 Alphas to Cane for a price of $100 per unit. What is the financial advantage (disadvantage) of buying 55,000 units from the supplier instead of making those units
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