9. Assume that Cane expects to produce and sell 84,000 Alphas during the current year. A supplier has offered to manufacture and deliver 84,000 Alphas to Cane for a price of $96 per unit. What is the financial advantage (disadvantage) of buying 84,000 uni
Cane Company manufactures two products called Alpha and Beta that sell for $140 and $100, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 106,000 units of each product. Its average cost per unit for each product at this level of activity are given below:
| Alpha | Beta | |||||||
| Direct materials | $ | 32 | $ | 16 | ||||
| Direct labor | 24 | 19 | ||||||
| Variable manufacturing overhead | 10 | 9 | ||||||
| Traceable fixed manufacturing overhead | 20 | 22 | ||||||
| Variable selling expenses | 16 | 12 | ||||||
| Common fixed expenses | 19 | 14 | ||||||
| Total cost per unit | $ | 121 | $ | 92 | ||||
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.
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9. Assume that Cane expects to produce and sell 84,000 Alphas during the current year. A supplier has offered to manufacture and deliver 84,000 Alphas to Cane for a price of $96 per unit. What is the financial advantage (disadvantage) of buying 84,000 uni
5. Assume that Cane expects to produce and sell 111,000 Alphas during the current year. One...
5. Assume that Cane expects to produce and sell 111,000 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; however pursuing this opportunity
will decrease Alpha sales to regular customers by 12,000 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
accepte
6....
5. Assume that Cane expects to produce and sell 105,000 Alphas during the current year. One...
5. Assume that Cane expects to produce and sell 105,000 Alphas
during the current year. One of Cane's sales representatives has
found a new customer who is 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?
Required...
4. Assume that Cane expects to produce and sell 100,000 Betas during the current year. One...
4. Assume that Cane expects to produce and sell 100,000 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 $49 per unit. What is the financial advantage
(disadvantage) of accepting the new customer's order?
Return to question 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...
8. Assume that Cane normally produces and sells 70,000 Betas and 90,000 Alphas per year. If...
8. Assume that Cane normally produces and sells 70,000 Betas and
90,000 Alphas per year. If Cane discontinues the Beta product line,
its sales representatives could increase sales of Alpha by 14,000
units. What is the financial advantage (disadvantage) of
discontinuing the Beta product line?
Required information [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...
Cane Company manufactures two products called Alpha and Beta that sell for $140 and $100, respectively...
Cane Company manufactures two products called Alpha and Beta that sell for $140 and $100, respectively Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 106,000 units of each product. Its unit costs for each product at this level of activity are given below: Beta S 16 Alpha S 32 24 10 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common...
Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively....
Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101,000 units of each product. Its unit costs for each product at this level of activity are given below: Alpha $ 30 Beta $ 12 20 6 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common...
Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively....
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 capacity to annually produce 100,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 30 $ 12 Direct labor 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead...
Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively....
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 capacity to annually produce 100,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 30 $ 12 Direct labor 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead...
Required information The following information applies to the questions displayed below.] Cane Company manufactures two products...
Required information The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $180 and $145, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 118,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha $ 36 Beta $ 24 27 17 32 19...
Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each produc...
Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 units of each product. Its average cost per unit for each product at this level of activity are given below: $40 $ 24 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total...
5. Assume that Cane expects to produce and sell 111,000 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; however pursuing this opportunity
will decrease Alpha sales to regular customers by 12,000 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
accepte
6....
5. Assume that Cane expects to produce and sell 105,000 Alphas
during the current year. One of Cane's sales representatives has
found a new customer who is 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?
Required...
4. Assume that Cane expects to produce and sell 100,000 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 $49 per unit. What is the financial advantage
(disadvantage) of accepting the new customer's order?
Return to question 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...
8. Assume that Cane normally produces and sells 70,000 Betas and
90,000 Alphas per year. If Cane discontinues the Beta product line,
its sales representatives could increase sales of Alpha by 14,000
units. What is the financial advantage (disadvantage) of
discontinuing the Beta product line?
Required information [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...
Cane Company manufactures two products called Alpha and Beta that sell for $140 and $100, respectively Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 106,000 units of each product. Its unit costs for each product at this level of activity are given below: Beta S 16 Alpha S 32 24 10 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common...
Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101,000 units of each product. Its unit costs for each product at this level of activity are given below: Alpha $ 30 Beta $ 12 20 6 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common...
Required information The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $180 and $145, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 118,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha $ 36 Beta $ 24 27 17 32 19...
Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 units of each product. Its average cost per unit for each product at this level of activity are given below: $40 $ 24 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total...
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