What is the company’s total amount of common fixed expenses? Assume that Cane ex
ID: 2481642 • Letter: W
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What is the company’s total amount of common fixed expenses?
Assume that Cane expects to produce and sell 97,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 27,000 additional Alphas for a price of $148 per unit. If Cane accepts the customer’s offer, how much will its profits increase or decrease?
Net Operating Income ______ by _______
Assume that Cane expects to produce and sell 107,000 Betas during the current year. One of Cane’s sales representatives has found a new customer that is willing to buy 4,000 additional Betas for a price of $80 per unit. If Cane accepts the customer’s offer, how much will its profits increase or decrease?
Net Operating INcome ______ by _____
Assume that Cane expects to produce and sell 112,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 27,000 additional Alphas for a price of $148 per unit. If Cane accepts the customer’s offer, it will decrease Alpha sales to regular customers by 12,000 units.
Calculate the incremental net operating income if the order is accepted? (Loss amount should be indicated with a minus sign.)
Assume that Cane normally produces and sells 107,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?
Profit_____ by_______
Assume that Cane normally produces and sells 57,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?
2.What is the company’s total amount of common fixed expenses?
3.Assume that Cane expects to produce and sell 97,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 27,000 additional Alphas for a price of $148 per unit. If Cane accepts the customer’s offer, how much will its profits increase or decrease?
Net Operating Income ______ by _______
4.Assume that Cane expects to produce and sell 107,000 Betas during the current year. One of Cane’s sales representatives has found a new customer that is willing to buy 4,000 additional Betas for a price of $80 per unit. If Cane accepts the customer’s offer, how much will its profits increase or decrease?
Net Operating INcome ______ by _____
5.Assume that Cane expects to produce and sell 112,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 27,000 additional Alphas for a price of $148 per unit. If Cane accepts the customer’s offer, it will decrease Alpha sales to regular customers by 12,000 units.
a.Calculate the incremental net operating income if the order is accepted? (Loss amount should be indicated with a minus sign.)
6.Assume that Cane normally produces and sells 107,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?
Profit_____ by_______
7.Assume that Cane normally produces and sells 57,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?
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: Alpha Beta $40$24 30 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 37 24 32 29 32 35 25 27 Total cost per unit $194 $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. value: 0.66 points Required. 1. What is the total amount of traceable fixed manufacturing overhead for the Alpha product line and for the Beta product line? Alpha Beta Traceable fixed manufacturing overheadExplanation / Answer
Traceable Fixed Costs Alpha Beta 1 Units Capacity 127000 127000 Unit Cost 32 35 Traceable Fixed Costs 4064000 4445000 2 Total Fixed Expenses Alpha Beta Per unit Total Per Unit Total Traceable Fixed Cost 32 4064000 35 4445000 Common Fixed Cost 32 4064000 27 3429000 Total 8128000 7874000 Alpha Units 97000 124000 Per Unit Total Selling price 205 19885000 23881000 (97000*205+27000*148) Direct Material 40 3880000 4960000 Direct Labor 37 3589000 4588000 Variable Overheads 24 2328000 2976000 Traceable Fixed Cost 4064000 4064000 Variable Selling Cost 29 2813000 3596000 Common Fixed Cost 4064000 4064000 Income -853000 -367000 The Net income will increase by $486,000 853000-367000 486000
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