Required information[The following information applies to the questions displayed below.]Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each productuses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000units of each product. Its average cost per unit for each product at this level of activity are given below:Alpha$ 30Direct materialsBetaDirect labor2015Variable manufacturing overheadTraceable fixed manufacturing overheadVariable selling expensesCommon fixed expenses171516181281510Total cost per unit$ 100$ 68The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expensesare unavoidable and have been allocated to products based on sales dollars.ces4. Assume that Cane expects to produce and sell 90,000 Betas during the current year. One of Cane's sales representatives has founda new customer who is willing to buy 5,000 additional Betas for a price of $39 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 $120 and $80, respectively. Each productuses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000units of each product. Its average cost per unit for each product at this level of activity are given below:Alpha$ 30BetaDirect materialsDirect laborVariable manufacturing overheadTraceable fixed manufacturing overheadVariable selling expenses$122015751618128Common fixed expenses1510Total cost per unit$ 100$ 68The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expensesare unavoidable and have been allocated to products based on sales dollars.3. Assume that Cane expects to produce and sell 80,000 Alphas during the current year. One of Cane's sales representatives hasfound a new customer who is willing to buy 10,000 additional Alphas for a price of $80 per unit. What is the financial advantage(disadvantage) of accepting the new customer's order?esFinancial advantage$ 2.000,000

Solution 4: Per unit Total units 5000 Incremental revenue 39 195000 Incremental…

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 $ 30 Beta $ 12 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 20 15 16 18 12 15 10 Total cost per unit $ 100 $ 68 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.

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 $ 30 Beta $ 12 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 20 15 16 18 12 15 10 Total cost per unit $ 100 $ 68 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.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 2PB: Five Card Draw manufactures and sells 10,000 units of Aces, which retails for $200, and 8,000 units...

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