[The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha...
Fantastic news! We've Found the answer you've been seeking!
Question:
![](https://dsd5zvtm8ll6.cloudfront.net/questions/2024/05/66448a5176c8c_1715767886645.jpg)
![](https://dsd5zvtm8ll6.cloudfront.net/questions/2024/05/66448a667bcc3_1715767909359.jpg)
Transcribed Image Text:
[The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $170 and $130, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 116,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Direct materials Direct labor Alpha $ 30 30 Beta $ 18 25 Variable manufacturing overhead 20 15 Traceable fixed manufacturing overhead 26 28 Variable selling expenses 22 18 Common fixed expenses 25 20 Total cost per unit $153 $124 The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 5. Assume Cane expects to produce and sell 105.000 Alphas during the current year. One of Cane's sales representatives found a new customer willing to buy 20,000 additional Alphas for a price of $120 per unit; however, pursuing this opportunity will decrease Alpha sales to regular customers by 9,000 units. 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. [The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $170 and $130, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 116,000 units of each product. Its average cost per unit for each product at this level of activity is given below. Direct materials Alpha $30 Beta $ 18 Direct labor 30 25 Variable manufacturing overhead 20 15 Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 26 28 22 18 25 20 Total cost per unit $153 $124 The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 6. Assume Cane normally produces and sells 100,000 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 $170 and $130, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 116,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Direct materials Direct labor Alpha $ 30 30 Beta $ 18 25 Variable manufacturing overhead 20 15 Traceable fixed manufacturing overhead 26 28 Variable selling expenses 22 18 Common fixed expenses 25 20 Total cost per unit $153 $124 The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 5. Assume Cane expects to produce and sell 105.000 Alphas during the current year. One of Cane's sales representatives found a new customer willing to buy 20,000 additional Alphas for a price of $120 per unit; however, pursuing this opportunity will decrease Alpha sales to regular customers by 9,000 units. 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. [The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $170 and $130, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 116,000 units of each product. Its average cost per unit for each product at this level of activity is given below. Direct materials Alpha $30 Beta $ 18 Direct labor 30 25 Variable manufacturing overhead 20 15 Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 26 28 22 18 25 20 Total cost per unit $153 $124 The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 6. Assume Cane normally produces and sells 100,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line?
Expert Answer:
Answer rating: 100% (QA)
Here are the steps to solve the problems 5a Cane expects to produce 105000 Alphas normally Taking 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:
Students also viewed these accounting questions
-
smith toolworks issued 2 0 year bonds 8 years ago with a 5 % coupon payment. The bonds are currently selling for 9 5 % of its face value, or $ 9 5 0 . What is Smith Toolwork's after - tax cost of...
-
Solve the linear equation with the x-intercept method. Check your answer. Approximate the solution to the nearest thousandth whenever appropriate. 2x = -(3x)
-
Two balanced dice are rolled. Refer to Fig. 5.1 on page 187 and determine the probability that the sum of the dice is IN FIGURE a. 6. b. even. c. 7 or 11. d. 2, 3, or 12.
-
Consider 5.00 mol of liquid water. (a) What volume is occupied by this amount of water? The molar mass of water is 18.0 g/mol (b) Imagine the molecules to be, on average, uniformly spaced, with each...
-
Forward Corporation is a progressive and fast-growing company. The company's executive committee consists of the president and the four vice presidents who report to the president-marketing,...
-
A can manufacturing company produces and sells three different types of cans: Versions X, Y, and Z. A high-level, simplified profit/loss statement for the company is provided here. Corporate overhead...
-
I've been playing Minecraft with my son, and I was really into digging for ore. Curious, I wanted to see if the frequency of ore he claimed I would obtain was accurate (a = 0.10). The probabilities...
-
3) [4 marks] Create truth table for the following logic circuit. a 0 0 0 0 1 1 1 b 0 0 1 1 0 0 1 1 (2 1 0 1 0 1 0 1 F
-
Question 1 Below, you are provided with the domestic demand and supply curves for palm trees. Use this diagram to answer all parts of this question. Price $1,400 $1,200 $1,000 $800 $600 $400 $200 50...
-
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $80 per unit and has a CM ratio of 40%. The company's fixed expenses are $360,000 per year. The...
-
After reviewing The Rhetorical Triangle information, compare and contrast how different the two following articles are on naps with regard to their audience, purpose, and effectiveness. ( You...
-
Point North Inc. issued bonds on September 1, 2023, with a par value of $230,000. The bonds mature in 15 years and pay 9.00% annual interest in two semiannual payments. On the issue date, the annual...
-
< 1. Is there any alternative to blowing the whistle? Make sure you have tried to remedy the problem by reporting up the normal chain of command and have had no success. 2. Does the proposed...
-
Logarithmic differentiation Take the logarithm of both sides of the following equation. Then apply the rules for logarithms to simplify the right-han side. x3 e4x y !! x +1 { y = [ (x^3 e^(4x) )/...
-
1A. If the researcher is concerned about the number of variables, the nature of the analysis, and completion rates, then, he/she is at which stage of the sampling design process (Figure 11.1 in the...
-
Because of a temporary cash shortage, Balister Company requested an extension of time on its purchases on account. Balisters regular vendor, Custom Products, requires that a 12% note be signed for...
-
TayVon Johnson, a new accounting department employee, questions the practice of recording interest income when a note is dishonored. Instead, he believes that the interest earned on the note should...
-
Why should accrued expenses be recorded by an adjusting entry before financial statements are prepared at the end of a fiscal period?
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App