Cane Company manufactures two products called Alpha and Beta that sell for $150 and $105, respectively....
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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 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 25 Traceable fixed manufacturing overhead 12 21 17 20 $ 125 Alpha 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. Beta 3.10 Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? 20 20 23 18 15 $91 Beta [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. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 25 12 21 17 20 $ 125 2. What is the company's total amount of common fixed expenses? Total common fixed expenses Betal $ 10 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. 20 10 23 13 15 $91 15 Required information [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 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $.30 25 12 21 17 20 $ 125 Beta $ 10 20 10 23 13 15 5.91 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. 3. Assume that Cane expects to produce and sell 85,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 15,000 additional Alphas for a price of $100 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? Required information [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: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhea Variable selling expenses Common fixed expenses Total cost per unit Alphe $34 25 12 21 17 $ 125 Beto $10 20 10 23 13 15 $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. 4. Assume that Cane expects to produce and sell 95,000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 5,000 additional Betas for a price of $44 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? 115 [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 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $30 Reg 5A 25 12 21 17 20 $ 125 Beta $ 10 20 10 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 5, Assume that Cane expects to produce and sell 100.000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 15,000 additional Alphas for a price of $100 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 8,000 units. Reg 5B 23 13 15 $91 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. What is the financial advantage (disadvantage) of accepting the new customer's order? Req 58 > 15 [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 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead. Variable selling expenses. Common fixed expenses Total cost per unit Alpha $30 25 12 21 17 20 $ 125 Beta $ 10 20 30 LE 15 $ 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. 6. Assume that Cane normally produces and sells 95,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? [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: Direct materials. Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $30 25 12 21 17 20 $125 Beta $ 10 28 10 23 13 15 $ 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. 7. Assume that Cane normally produces and sells 45.000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? [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. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $30 25 12 17 20 $125 Beta $10 20 10 2.3 DE $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. 8. Assume that Cane normally produces and sells 65.000 Betas and 85,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 20,000 units What is the financial advantage (disadvantage) of discontinuing the Beta product line? 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 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 25 Traceable fixed manufacturing overhead 12 21 17 20 $ 125 Alpha 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. Beta 3.10 Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? 20 20 23 18 15 $91 Beta [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. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 25 12 21 17 20 $ 125 2. What is the company's total amount of common fixed expenses? Total common fixed expenses Betal $ 10 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. 20 10 23 13 15 $91 15 Required information [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 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $.30 25 12 21 17 20 $ 125 Beta $ 10 20 10 23 13 15 5.91 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. 3. Assume that Cane expects to produce and sell 85,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 15,000 additional Alphas for a price of $100 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? Required information [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: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhea Variable selling expenses Common fixed expenses Total cost per unit Alphe $34 25 12 21 17 $ 125 Beto $10 20 10 23 13 15 $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. 4. Assume that Cane expects to produce and sell 95,000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 5,000 additional Betas for a price of $44 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? 115 [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 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $30 Reg 5A 25 12 21 17 20 $ 125 Beta $ 10 20 10 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 5, Assume that Cane expects to produce and sell 100.000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 15,000 additional Alphas for a price of $100 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 8,000 units. Reg 5B 23 13 15 $91 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. What is the financial advantage (disadvantage) of accepting the new customer's order? Req 58 > 15 [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 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead. Variable selling expenses. Common fixed expenses Total cost per unit Alpha $30 25 12 21 17 20 $ 125 Beta $ 10 20 30 LE 15 $ 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. 6. Assume that Cane normally produces and sells 95,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? [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: Direct materials. Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $30 25 12 21 17 20 $125 Beta $ 10 28 10 23 13 15 $ 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. 7. Assume that Cane normally produces and sells 45.000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? [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. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $30 25 12 17 20 $125 Beta $10 20 10 2.3 DE $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. 8. Assume that Cane normally produces and sells 65.000 Betas and 85,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 20,000 units What is the financial advantage (disadvantage) of discontinuing the Beta product line?
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Answer rating: 100% (QA)
Required 1 Required 2 Required 3 To calculate the financial advantage or disadvantage of accepting the new customers order for 15000 additional Alphas we need to compare the contribution margin for th... View the full answer
Related Book For
Introduction to Managerial Accounting
ISBN: 978-0078025792
7th edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen
Posted Date:
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