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 costs: Direct materials 12 60000 Direct labor 15 75000 Variable manufacturing overhead 5 25000 Variable selling expense 8 40000 Total Incremental cost 40 200000 Profits Increase (Decrease) from Offer Decrease -5000 Solution 3: Per unit Total units 10000 Incremental revenue 80 800000 Incremental costs: Direct materials 30 300000 Direct labor 20 200000 Variable manufacturing overhead 7 70000 Variable selling expense 12 120000 Total Incremental cost 69 690000 Profits Increase (Decrease) from Offer Increase 110000

Business

Accounting

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Cane Company manufactures two products called Alpha and Beta that sell for $150 and $105, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 107,000 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 $ 10 Direct labor 25 20 Variable manufacturing overhead 12 10 Traceable fixed manufacturing overhead 21 23 Variable selling expenses 17 13 Common fixed expenses 20 15 Total cost per unit $ 125 $ 91 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. 1. Assume that Cane expects to produce and sell 55,000 Alphas during the current year. A supplier has offered to manufacture and deliver 55,000 Alphas to Cane for a price of $100 per unit. What is the financial…
Ovation Company has a single product called a Bit. The company normally produces and sells 64,800 Bits each year at a selling price of $47 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $10.50 7.50 3.60 4.80 ($311,040 total) 6.60 2.70 ($174,960 total) $35.70 A number of questions relating to the production and sale of Bits follow. Each question is independent. Required. 1. Assume that Ovation Company has sufficient capacity to produce 97,200 Bits each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the current 64,800 units each year if it were willing to increase the fixed selling expenses by $105,000. a. Calculate the incremental net operating income. Incremental operating income $ 199,560 b. Would the increased fixed selling…
Haresh
Denger
Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 24 $ 12 Direct labor 23 26 Variable manufacturing overhead 22 12 Traceable fixed manufacturing overhead 23 25 Variable selling expenses 19 15 Common fixed expenses 22 17 Total cost per unit $ 133 $ 107 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? what is the alpha and beta
Kubin Company's relevant range of production is 15,000 to 19,000 units. When it produces and sells 17,000 units, its average costs per unit are as follows: Amount per Unit $ 7.60 $ 4.60 $ 2.10 $ 5.60 $ 4.10 $ 3.10 $ 1.60 $ 1.10 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Required: 1. If 15,000 units are produced and sold, what is the variable cost per unit produced and sold? 2. If 19,000 units are produced and sold, what is the variable cost per unit produced and sold? 3. If 15,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 4. If 19,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 5. If 15,000 units are produced, what is the average fixed manufacturing cost per unit produced? 6. If 19,000 units are produced,…
Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 24 $ 12 Direct labor 23 26 Variable manufacturing overhead 22 12 Traceable fixed manufacturing overhead 23 25 Variable selling expenses 19 15 Common fixed expenses 22 17 Total cost per unit $ 133 $ 107 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? 3. Assume that Cane expects to produce and sell 87,000 Alphas during the current year. One of Cane's sales representatives has found a…
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 32,000 Rets per year. Costs associated with this level of production and sales are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Unit $ 15 6 3 5 160,000 4 128,000 192,000 6 $ 39 $ 1,248,000 Total $ 480,000 192,000 96,000 The Rets normally sell for $44 each. Fixed manufacturing overhead is $160,000 per year within the range of 25,000 through 32,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 25,000 Rets through regular channels next year. A large retail chain has offered to purchase 7,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company…
Please do not give image format and explanation
! Required information [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 product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 131,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Direct materials. Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 35 Pounds of raw materials per unit 48 27 35 Alpha 32 35 $ 212 The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Betal $ 15 23 11. How many pounds of raw material are needed to make one unit of each of the two products? 25 38 28 30 $ 159 Beta
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 50,000 Rets per year. Costs associated with this level of production and sales are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Unit $ 20 Total $1,000,000 8 400,000 3 150,000 9 450,000 4 200,000 6 300,000 $50 $2,500,000 The Rets normally sell for $55 each. Fixed manufacturing overhead is $450,000 per year within the range of 41,000 through 50,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 41,000 Rets through regular channels next year. A large retail chain has offered to purchase 9,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company…