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Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 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. Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 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. 2. What is the company's total amount of common fixed expenses? Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 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 82,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 12,000 additional Alphas for a price of $88 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 $130 and $90, respectively. Each product. uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 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 92.000 Betas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 2.000 additional Betas for a price of $41 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 $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 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 97,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 12.000 additional Alphas for a price of $88 per unit: however pursuing this opportunity will decrease Alpha sales to regular customers by 7.000 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. What is the financial advantage (disadvantage) of accepting the new customer's orden? 5. Assume that Cane expects to produce and sell 97,000 Alphas during the current year. One of Cane's sales reptesentatives has found a new customer who is willing to buy 12,000 additional Alphas for a price of $88 per unit: however pursuing this opportunity will decrease Alpha sales to regular customers by 7,000 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. 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 $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102.000 units of each product. Its average cost per unit for each product at this level of activity are given below: The company considers its traceable fixed manufacturing overhead to be avoldable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars: Assume that Cane normally produces and sells 92,000 Betas per year. What is the financial advantage (disadvantage) of iscontinuing the Beta product line? Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively, Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of actlitity are given below: The company considers its traceable fixed manufacturing overhead to be avoidable. whereas its common fixed expenses are unavoidabie and have been allocated to products based on sales dollars. 7. Assume that Cane normally produces and sells 42.000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line? Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 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. Assume that Cane normally produces and sells 62.000 Betas and 82,000 Alphas per year. If Cane discontinues the Beta product ne, Its sales representatives could increase sales of Alpha by 17,000 units. What is the financial advantage (disadvantage) of liscontinuing the Beta product line? Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 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. Assume that Cane expects to produce and sell 82,000 Alphas duting the current year. A supplier has offered to manufacture and bellver 82,000 . Alphas to Cane for a price of $88 per unit. What is the financial advantage (disadvantage) of buying 82,000 units from he supplier instead of making those units? Cane Company manulactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are glveri below The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoldable and have been allocated to products based on sales dollars Assume that Cane expects to produce and sell 52.000 Aphas during the curtent yeat. A supplier has offered to manufacture and chlver 52.000 Aphas to Cane for a price of $88 per unit. What is the financial advantage (disadvantage) of buying 52,000 units from he supplier instead of making those units? Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of actlvity are given below: 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. 11. How many pounds of raw material are needed to make one unit of each of the two products? Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectlvely. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below: 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. 12. What contribution margin per pound of raw material is eamed by each of the two products? Note: Round your answers to 2 decimal places. Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of actlvity are given below: The company considers its traceable fixed manufacturing overhead to be avoldable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 3. Assume that Cane's customers would buy a maximum of 82,000 units of Alpha and 62.000 units of Beta. Also assume that the raw naterial available for production is limited to 162.000 pounds. How many units of each product should Cane produce to maximize its arofits? Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102.000 units of each product. Its average cost per unit for each product at this level of actlvity are given below: 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's customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta, Also assume that the raw paterial avallable for production is limited to 162.000 pounds. What is the total contribution margin Cane Company will earn? Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectlvely. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below. 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. 15. Assume that Cane's customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the company's raw material avallable for production is limited to 162,000 pounds. If Cane uses its 162,000 pounds of raw materials, up to how much should it be willing to pay per pound for additional raw materials? Note: Round your answer to 2 decimal places

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