[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 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: Beta Alpha $ 30 $ 12 Direct materials Direct labor 20 15 Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 16 18 12 8 15 10 $ 100 $ 68 Total cost per unit 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. 7. Assume that Cane normally produces and sells 40,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line?
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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[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
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:
Direct materials
Direct labor
Alpha
$ 30
Beta
$ 12
15
20
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
16
18
12
15
10
$ 100
$ 68
Total cost per unit
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.
7. Assume that Cane normally produces and sells 40,000 Betas per year. What is the financial advantage (disadvantage) of
discontinuing the Beta product line?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbac5cd56-9885-4a25-8e51-dfc1bb78a29e%2F17e0bcfc-810e-4a55-9d20-25a5a6ac6a0f%2Fx57agck_processed.jpeg&w=3840&q=75)
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