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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:
Direct materials
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
Total cost per unit
Alpha
$24
23
22
23
19
22
$ 133
Financial advantage
Beta
$ 12
26
12
25
15
17
$ 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.
7. Assume that Cane normally produces and sells 47,000 Betas per year. What is the financial advantage (disadvantage) of
discontinuing the Beta product line?](https://content.bartleby.com/qna-images/question/eeeb5c16-fe6a-49c7-b97b-717b587cb63e/0014d690-ac25-4000-8855-98e954fbe9b3/qv3gfvq_processed.png)
![!
Required information
[The following information applies to the questions displayed below.]
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:
Direct materials
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
Total cost per unit
Alpha
$ 24
23
Beta
$12
Total contribution margin
26
12
22
23
25
19
15
22
17
$ 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.
14. Assume that Cane's customers would buy a maximum of 87,000 units of Alpha and 67,000 units of Beta. Also assume that the raw
material available for production is limited to 168,000 pound What is the total contribution margin Cane Company will earn?](https://content.bartleby.com/qna-images/question/eeeb5c16-fe6a-49c7-b97b-717b587cb63e/0014d690-ac25-4000-8855-98e954fbe9b3/a9bmv5g_processed.png)
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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:
| Alpha | Beta | |
|---|---|---|
| Direct materials | $ 25 | $ 10 |
| Direct labor | 22 | 21 |
| Variable manufacturing |
17 | 7 |
| Traceable fixed manufacturing overhead | 18 | 20 |
| Variable selling expenses | 14 | 10 |
| Common fixed expenses | 17 | 12 |
| Total cost per unit | $ 113 | $ 80 |
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.
9. Assume that Cane expects to produce and sell 82,000 Alphas during the current year. A supplier has offered to manufacture and deliver 82,000 Alphas to Cane for a price of $88 per unit. What is the financial advantage (disadvantage) of buying 82,000 units from the 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 activity are given below:
| Alpha | Beta | |
|---|---|---|
| Direct materials | $ 25 | $ 10 |
| Direct labor | 22 | 21 |
| Variable manufacturing |
17 | 7 |
| Traceable fixed manufacturing overhead | 18 | 20 |
| Variable selling expenses | 14 | 10 |
| Common fixed expenses | 17 | 12 |
| Total cost per unit | $ 113 | $ 80 |
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.
13. 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 material available for production is limited to 162,000 pounds. How many units of each product should Cane produce to maximize its profits?
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:
| Alpha | Beta | |
|---|---|---|
| Direct materials | $ 25 | $ 10 |
| Direct labor | 22 | 21 |
| Variable manufacturing |
17 | 7 |
| Traceable fixed manufacturing overhead | 18 | 20 |
| Variable selling expenses | 14 | 10 |
| Common fixed expenses | 17 | 12 |
| Total cost per unit | $ 113 | $ 80 |
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.
9. Assume that Cane expects to produce and sell 82,000 Alphas during the current year. A supplier has offered to manufacture and deliver 82,000 Alphas to Cane for a price of $88 per unit. What is the financial advantage (disadvantage) of buying 82,000 units from the 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 activity are given below:
| Alpha | Beta | |
|---|---|---|
| Direct materials | $ 25 | $ 10 |
| Direct labor | 22 | 21 |
| Variable manufacturing |
17 | 7 |
| Traceable fixed manufacturing overhead | 18 | 20 |
| Variable selling expenses | 14 | 10 |
| Common fixed expenses | 17 | 12 |
| Total cost per unit | $ 113 | $ 80 |
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.
13. 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 material available for production is limited to 162,000 pounds. How many units of each product should Cane produce to maximize its profits?
- answer in text form please (without image)arrow_forward! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 127,000 units of each product. Its unit costs for each product at this level of activity are given below: Direct materials Direct labour Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Cost per unit Alpha $ 40 37 24 32 29 32 $194 Beta $ 24 30 Total contribution margin 22 35 25 27 $163 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars. 14. Assume that Cane's customers would buy a maximum of 97,000 units of Alpha and 77,000 units of Beta. Also assume that the…arrow_forwardCane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 21 8 Traceable fixed manufacturing overhead 17 13 16 $ 105 Alpha Beta 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 20 Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? Beta 19 9 11 $ 77arrow_forward
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- Dinesh Bhaiarrow_forwardMemanarrow_forwardDake Corporation's relevant range of activity is 2,300 units to 5,500 units. When it produces and sells 3,900 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Multiple Choice For financial reporting purposes, the total amount of product costs incurred to make 3,900 units is closest to: $57,915 $48,165 $61,815 Average Cost per Unit $ 6.80 $ 4.00 $ 1.55 $9,750 $2.50 $ 1.15 $ 0.85 $0.95 $ 0.85arrow_forward
- Please help me with show all calculation thankuarrow_forward! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $190 and $155, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 122,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 40 34 21 29 26 29 $ 179 Beta Maximum price to be paid per pound $24 28 19 32 22 24 $ 149 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 94,000 units of Alpha and 74,000 units of Beta.…arrow_forwardGodoarrow_forward
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