Cane Company manufactures two products called Alpha and Beta that sell for $215 and $160, respectively....
Fantastic news! We've Found the answer you've been seeking!
Question:
![image](https://dsd5zvtm8ll6.cloudfront.net/questions/2024/05/663dc11c8258d_164663dc11c7c7a5.jpg)
Transcribed Image Text:
Cane Company manufactures two products called Alpha and Beta that sell for $215 and $160, respectively. Each product uses only one type of raw material that costs $7 per pound. The company has the capacity to annually produce 125,000 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 Beta $ 42 $ 21 35 28 23 21 31 34 28 24 31 26 $ 190 $ 154 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 (Algo) 3. Assume that Cane expects to produce and sell 96,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 26,000 additional Alphas for a price of $144 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order? Cane Company manufactures two products called Alpha and Beta that sell for $215 and $160, respectively. Each product uses only one type of raw material that costs $7 per pound. The company has the capacity to annually produce 125,000 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 Beta $ 42 $ 21 35 28 23 21 31 34 28 24 31 26 $ 190 $ 154 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 (Algo) 3. Assume that Cane expects to produce and sell 96,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 26,000 additional Alphas for a price of $144 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order?
Expert Answer:
Answer rating: 100% (QA)
Financial Advantage Disadvantage of Accepting the Special Order Relevant Costs Variable costs per un... View the full answer
Posted Date:
Students also viewed these accounting questions
-
0. If the interest rate in the United Kingdom is 6 percent, the interest rate in the United States is 4 percent, the spot exchange rate is $1.6012/1, and interest rate parity holds, what must be the...
-
Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the...
-
Why is the goal of a firm is to maximise shareholders value but not profit maximisation ? Discuss.
-
A solid conducting cylinder of radius 0.1 m and mass of 4 kg rests on horizontal conducting rails (Figure). The rails, separated by a distance a?= 0.4 m, have a rough surface so the cylinder rolls...
-
Data set: Triglyceride levels (in milligrams per deciliter of blood) of 26 patients Construct a frequency distribution and a relative frequency histogram for the data set using five classes. Which...
-
Sheldon Corporation projects the following free cash flows (FCFs) and interest expenses for the next 3 years, after which FCF and interest expenses are expected to grow at a constant 7% rate....
-
Mondao Computing is considering an investment of $2.3 million in new equipment. The predicted cash inflows and outflows are as shown below: Mondao depreciates its equipment over five years and uses a...
-
An Ionic Crystal Figure shows eight point charges arranged at the corners of a cube with sides of length d. The values of the charges are +q and -q, as shown. This is a model of one cell of a cubic...
-
5+10 U T 110 Solve for x. O 20 09 V 1
-
This essay/short answer exam consists of five questions. Each answer needs an introduction with a topic sentence, a body, a conclusion, and at least 2 references in. Answers need to be in essay...
-
-Why should someone consider relying only on intuition to make a decision? -At what level/stage in one's career should there be a switch to intuition? Can thinking intuitively be taught? -What are...
-
Carl smith heard that Joe Dunn was suing the managers of XYZ Company and that a full story would appear in Sunday's newspaper. Carl quickly alerted managers, who were able to stop the newspaper from...
-
CD e 15 You purchased one TXT call option with a strike price of $56, for a premium of $1.6 and wrote one TXT put option with a strike price of $59, for a premium of $2.3. Without considering...
-
When COVID hit, businesses were forced to implement various strategies in order to reach customers and keep money coming in. This is particularly relevant for developing Strategic Marketing Plans and...
-
1 . Using the capital utilization approach, calculate the capital needed at retirement ( age 6 7 ) for the Joneses. Assume a 9 % after - tax rate of return. Base the calculation on Harry\'s salary...
-
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Incorporated) on January 1, 2020. The annual reporting period ends December 31. The trial balance on...
-
You continue to work in the corporate office for a nationwide convenience store franchise that operates nearly 10,000 stores. The per- store daily customer count (i.e., the mean number of customers...
-
Fortune Company enters into a risk service agreement with the Chilean government. Fortune pays the government, in U.S. dollars, a \($5,000,000\) signing bonus and also agrees to pay all of the costs...
-
Ibis Company enters into a concession agreement with the British government. Ibis pays the government a \($10,000,000\) (U.S.) signing bonus and agrees to pay the government royalties of 8% of gross...
-
What does a high net wells to gross wells ratio indicate?
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App