Accounting-Managerial - 28036

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Tami17a

Tami17a

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Price: $15
  • From: Business,
  • Due on: Tue 08 Oct, 2013 (12:26pm)
  • Asked on: Tue 08 Oct, 2013
  • Due date has passed, but you can still Post Solution.
Description

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 unit costs for each product at this                    level of activity are given below:                

                

Alpha Beta                

Direct Materials $30 $12                

Direct Labor 20 15                

Variable manufacturing overhead 7 5                

Traceable fixed manufacturing overhead 16 18                

Variable selling expenses 12 8                

Common fixed expenses 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 deemed unavoidable                    and have been allocated to products based on sales dollars.                

                

Required to Answer:                

                

                    1. What is the total amount of traceable fixed manufacturing overhead for the Alpha product line and for the Beta product line?                

 

                    2. What if the company's total amount of common fixed expenses?                

 

                    3. Assume that Cane expects to produce and sell 80,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is                    willing to buy 10,000 additional Alphas for a price of $80 per unit. If Cane accepts the customer's offer, how much will its profits increase or decrease?                

 

4. Assume that Cane expects to produce and sell 90,000 Betas during the current year. One of Cane's sales representatives has found a new customer that is                    willing to buy 5,000 additional Betas for a price of $39 per unit. If Cane accepts the customer's offer, how much will its profits increase or decrease?                

 

                    5. Assume that Cane expects to produce and sell 95,000 Alphas during the current year. One of Cane's sale representatives has found a new customer willing to                    buy 10,000 additional Alphas for a price of $80 per unit. If Cane accepts the customer's offer, it will decrease Alpha sales to regular customers by 5,000                    units. Should Cane accept this special order?                

 

                    6. Assume that Cane produces and sells 90,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?                

 

                    7. Assume that Cane produces and sells 40,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?                

 

                    8. Assume that Cane normally produces and sells 60,000 Betas and 80,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives                    could increase sales of Alpha by 15,000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease?                

 

                    9. Assume that Cane expects to produce and sell 80,000 Alphas during the current year. A supplier has offered to manufacture and deliver 80,000 Alphas to Cane                    for a price of $80 per unit. If Cane buys 80,000 units from the supplier instead of making those units, how much will those profits increase or decrease?                

 

                    10. Assume that Cane expects to produce and sell 50,000 Alphas during the current year. A supplier has offered to manufacture and deliver 50,000 Alphas to Cane                    for a price of $80 per unit. If Cane buys 50,000 units from the supplier instead of making those units, how much will profits increaseor decrease?

2 Solution for Accounting-Managerial
Title Price Category solution By purchased  
Cane Company (Alpha and Beta) __ Correct w/ Solutions ! ACCOUNTANT you can trust!!
$15.00 no category rubyCpaMba 0 time(s)
CANE COMPANY : Costing _Alpha_Beta_problem _solutions
$15.00 no category Bilbo 2 time(s)
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