Required InformatlonThe Foundational 15 (Algo) [LO13-2, LO13-3, LO13-4, LO13-5, LO13-6][The following information applies to the questions displayed below.]Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively. Each productuses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 131,000units of each product. Its average cost per unit for each product at this level of activity are given below:Alpha$ 35BetaDirect materials$ 15Direct labor4823Variable manufacturing overheadTraceable fixed manufacturing overheadVariable selling expensesCommon fixed expenses2725353832283530Total cost per unit$ 212$ 159The 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.Foundational 13-5 (Algo)5. Assume that Cane expects to produce and sell 115,000 Alphas during the current year. One of Cane's sales representatives hasfound a new customer who Is willing to buy 30,000 additional Alphas for a price of $160 per unit; however pursuing this opportunitywill decrease Alpha sales to regular customers by 14,000 units.a. What Is the financial advantage (disadvantage) of accepting the new customer's order?b. Based on your calculations above should the speclal order be accepted?Complete this question by entering your answers in the tabs below.Req 5AReq 5BWhat is the financial advantage (disadvantage) of accepting the new customer's order?Financial (disadvantage)S (1,028,000)

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Description: Required InformatlonThe Foundational 15 (Algo) [LO13-2, LO13-3, LO13-4, LO13-5, LO13-6][The following information applies to the questions displayed below.]Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, res

Solution: Profit from special order depends on the special price and relevant cost for special order…

Business

Accounting

Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively. Each prod uses only one type of raw materlal that costs $5 per pound. The company has the capacity to annually produce 131,00 units of each product. Its average cost per unit for each product at this level of activity are glven below: Beta Alpha $ 35 48 $ 15 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 23 27 25 35 38 32 28 35 30 Total cost per unit S 212 $ 159 The company considers its traceable fixed manufacturing overhead to be avoldable, whereas Iits common fixed expen: are unavoldable and have been allocated to products based on sales dollars. dational 13-5 (Algo) ume that Cane expects to produce and sell 115,000 Alphas during the current year. One of Cane's sales representative a new customer who Is willing to buy 30,000 additional Alphas for a price of $160 per unit; however pursuing this opp crease Alpha sales to regular customers by 14,000 units. t is the financial advantage (disadvantagel of accenting the new customer's ordier?

Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively. Each prod uses only one type of raw materlal that costs $5 per pound. The company has the capacity to annually produce 131,00 units of each product. Its average cost per unit for each product at this level of activity are glven below: Beta Alpha $ 35 48 $ 15 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 23 27 25 35 38 32 28 35 30 Total cost per unit S 212 $ 159 The company considers its traceable fixed manufacturing overhead to be avoldable, whereas Iits common fixed expen: are unavoldable and have been allocated to products based on sales dollars. dational 13-5 (Algo) ume that Cane expects to produce and sell 115,000 Alphas during the current year. One of Cane's sales representative a new customer who Is willing to buy 30,000 additional Alphas for a price of $160 per unit; however pursuing this opp crease Alpha sales to regular customers by 14,000 units. t is the financial advantage (disadvantagel of accenting the new customer's ordier?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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