The Foundational 15 (LO11-2, 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 $210 and $172, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 128,000 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 38 25 33 30 33 $199 Beta $ 24 34 23 36 26 28 $171 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 11-3 3 of 15 Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit $40 38 25 33 30 33 $199 Beta $ 24 34 23 35 25 28 5171 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. Book Hes rint Foundational 11-3 Fences 3. Assume that Cane expects to produce and sell 98,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 28,000 additional Alphas for a price of $152 per unit. What is the financial advantage (disadvantage) of accepting the new customers order? Financial advantage Next > BU SL 15 of 20 Verhead to be avoidable, common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Foundational 11-4 4. Assume that Cane expects to produce and sell 108,000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 3,000 additional Betas for a price of $81 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? Financial (disadvantage) Financial advantage CD 6 4 Next > 5 15 of 20 CRESA BAR BBB Next > aceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit 25 33 30 33 $199 34 23 36 26 28 $171 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 11-6 ES 6. Assume that Cang normally produces and sells 108,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? Next > PS 15 of 20