***** I HONESTLY HAVE NO IDEA, IF SOMEONE COULD HELP ME THAT WOULD BE WONDERFUL!
ID: 2481967 • Letter: #
Question
***** I HONESTLY HAVE NO IDEA, IF SOMEONE COULD HELP ME THAT WOULD BE WONDERFUL!*********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 unit costs 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 deemed unavoidable and have been allocated to products based on sales dollars.
Required:
1.
What is the total amount of traceable fixed manufacturing overhead for the Alpha product line and for the Beta product line?
2.
What is the company’s total amount of common fixed expenses?
4.
Assume that Cane expects to produce and sell 95,000 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 $44 per unit. If Cane accepts the customer’s offer, how much will its profits increase or decrease?
12.
What contribution margin per pound of raw material is earned by Alpha and Beta? (Round your answers to 2 decimal places.)
13.
Assume that Cane’s customers would buy a maximum of 85,000 units of Alpha and 65,000 units of Beta. Also assume that the company’s raw material available for production is limited to 166,000 pounds. How many units of each product should Cane produce to maximize its profits?
14.
Assume that Cane’s customers would buy a maximum of 85,000 units of Alpha and 65,000 units of Beta. Also assume that the company’s raw material available for production is limited to 166,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?
15.
Assume that Cane’s customers would buy a maximum of 85,000 units of Alpha and 65,000 units of Beta. Also assume that the company’s raw material available for production is limited to 166,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)
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
Explanation / Answer
Answer:1 The total traceable fixed manufacturing overhead for Alpha and Beta is computed as follows:
Answer:2
Answer:4 The profit impact is computed as follows:
Answer:12
Particulars Alpha Beta Traceable fixed overhead per unit 21 23 Level of Activity in units 107000 107000 Total traceable fixed overhead 2247000 2461000Related Questions
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