In: Accounting

# Cane Company manufactures two products called Alpha and Beta that sell for $240 and$162, respectively....

 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 $5 per pound. The company has the capacity to annually produce 131,000 units of each product. Its unit costs for each product at this level of activity are given below:  Alpha Beta Direct materials$ 35 $15 Direct labor 48 23 Variable manufacturing overhead 27 25 Traceable fixed manufacturing overhead 35 38 Variable selling expenses 32 28 Common fixed expenses 35 30 Total cost per unit$ 212 $159  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. 6. Assume that Cane normally produces and sells 110,000 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 80,000 Betas and 100,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 13,000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease? 9. Assume that Cane expects to produce and sell 100,000 Alphas during the current year. A supplier has offered to manufacture and deliver 100,000 Alphas to Cane for a price of$160 per unit. If Cane buys 100,000 units from the supplier instead of making those units, how much will profits increase or decrease?

##### Cane Company manufactures two products called Alpha and Beta that sell for $210 and$172, respectively....
Cane Company manufactures two products called Alpha and Beta that sell for $210 and$172, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 128,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials$ 40 \$ 24 Direct labor 38 34 Variable manufacturing overhead 25 23 Traceable fixed manufacturing overhead...