Use the information below to answer questions 1-5. UNIT COSTS(based on production of 100,000 units of...

Use the information below to answer questions 1-5.

UNIT COSTS(based on production of 100,000 units of each product).	ALPHA	BETA
DIRECT MATERIAL	$24	$18
DIRECT LABOR	20	16
VARIABLE OVERHEAD	10	6
VARIABLE SALES	10	6
TRACEABLE FIXED	12	10
COMMON FIXED COST	14	12

ADDITIONAL INFORMATION
SELLING PRICE PER UNIT	$120	$80
MATERIAL COST PER POUND	6	6
The company considers its traceable fixed cost to be avoidable.
whereas its common fixed expenses are unavoidable.

Required: (Answer each question)
1. What is the total amount of traceable fixed manufacturing overhead for each of the two products?

2. What is 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 who is willing to buy 10,000 additional Alphas for a price of $80 per unit. What is the financial advantage (disadvantage) of accepting the new customer’s order?

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 who is willing to buy 5,000 additional Betas for a price of $39 per unit. What is the financial advantage (disadvantage) of accepting the new customer’s order?

5. Assume that Cane expects to produce and sell 95,000 Alphas during the current year. One of Cane’s sales representatives has found a new customer who is willing to buy 10,000 additional Alphas for a price of $80 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 5,000 units. What is the financial advantage (disadvantage) of accepting the new customer’s order?

Expert Solution

ekkarill92 answered 1 year ago

Use the following information to answer questions 1-5: Suppose # of units sold (Q) = 100,000...

Use the following information to answer questions 1-5: Suppose # of units sold (Q) = 100,000 Price per unit (P) = $10 Variable cost (V) = $4 Fixed operating costs =250,000 Fixed financing cost = 100,000 Tax rate is 35%. DOL = 1.71 DFL = 1.4 DTL = 2.4 How does net income change if unit sales increases by 3%? = 5.13% How does financial leverage affect net income given a 1% change in operating income? *I only need #5...

Use the information in the table below to answer the following questions. Production per unit of...

Use the information in the table below to answer the following questions. Production per unit of Labor U.S. Argentina Wheat 100 200 Beef 200 400 Does either country have an absolute advantage in the production of wheat or beef? Explain. (b) What is the opportunity cost of wheat in each country? (c) What is the opportunity cost of beef in each country? (d) Analyze comparative advantage and opportunities for trade between the U.S. and Argentina. Unit labor Requirements...

Use the following information for questions 1-5: # of units produced 6,600 Variable Costs per Unit:...

Use the following information for questions 1-5: # of units produced 6,600 Variable Costs per Unit: Direct Materials $46 Direct Labor $16 Variable Manufacturing Overhead $8 Variable Selling & Admin. Expense $4 Fixed Costs per year: Fixed Manufacturing Overhead $234,300 Fixed Selling & Admin $161,700 The Absorption Costing Unit Product Cost is: $100.20 $105.50 $74 $70 The Variable Costing Unit Product Cost is: $70 $74 $105.50 $100.20 If 6,000 units are sold during the period, total period cost under variable...

1. Use the information below to answer the following questions. The following units of an inventory...

1. Use the information below to answer the following questions. The following units of an inventory item were available for sale during the year: Beginning inventory 10 units at $55 First purchase 25 units at $60 Second purchase 30 units at $65 Third purchase 15 units at $70 The firm uses the periodic inventory system. During the year, 60 units of the item were sold. a. Calculate the value of ending inventory using FIFO. b. Calculate the value of ending...

Use the following information for questions # of units produced 6,600 Variable Costs per Unit: Direct...

Use the following information for questions # of units produced 6,600 Variable Costs per Unit: Direct Materials $46 Direct Labor $16 Variable Manufacturing Overhead $8 Variable Selling & Admin. Expense $4 Fixed Costs per year: Fixed Manufacturing Overhead $234,300 Fixed Selling & Admin $161,700 The Absorption Costing Unit Product Cost is: Group of answer choices $100.20 $105.50 $74 $70 The Variable Costing Unit Product Cost is: Group of answer choices $70 $74 $105.50 $100.20 If 6,000 units are sold during...

Production and Costs Homework #5 Please answer all questions and each part The following information that...

Production and Costs Homework #5 Please answer all questions and each part The following information that apply to Lisa’s Cupcake Shoppe should be used to answer the questions. Quantity of Labor (workers) Quantity of cupcakes (TPP) MPP TVC TFC TC MC AVC AFC ATC 0 0 1 110 2 200 3 270 4 300 5 320 6 330 Lisa’s Cupcake Shoppe is a small shop that sells cupcakes in a university town. Lisa owns three mixers. Her other inputs are ovens,...

Use the following information to answer the questions below:

Use the following information to answer the questions below: note: all sales are credit sales Income Stmt info: 2016 2017 Sales $ 975,000 $ 1,072,500 less Cost of Goods Sold: 325,000 346,125 Gross Profit 650,000 726,375 Operating Expenses 575,000 609,500 Earnings before Interest & Taxes 75,000 116,875 Interest exp 25,000 31,000 earnings before Taxes 50,000 85,875 Taxes 20,000 34,350 Net Income $ 30,000 $ 51,525 Balance Sheet info: 12/31/2016 12/31/2017 Cash 60,000 $ 63,600 Accounts Receivable 80,000 $ 84,000 Inventory...

LL company budgeted 100,000 units for production during 2019. The following cost per unit information is...

LL company budgeted 100,000 units for production during 2019. The following cost per unit information is available: direct material = $5, direct labour = $10, variable manufacturing overhead = $4, variable selling per unit= $2. LL sells at $50 market price. It received a special order for 10,000 units from a new customer in a country in which LL has never done business. This customer has offered special order price at $22 per unit. If LL accepts the order, there...

Use the information below to answer the following two questions: Star Jewelry sells 500 units resulting...

Use the information below to answer the following two questions: Star Jewelry sells 500 units resulting in $75,000 of sales revenue, $28,000 of variable costs, and $18,000 of fixed costs. The company's effective tax rate is 25%. 1) Breakeven point in units is ________. A) 28,723 units B) 120 units C) 187 units D) 192 units 14) 2) The number of units that must be sold to achieve $40,000 of operating income is ________. A) 590 units B) 399 units...

Use the Following Information to Answer the Questions Below to prepare the Bank Reconciliation 1) If...

Use the Following Information to Answer the Questions Below to prepare the Bank Reconciliation 1) If Any Differences or Errors are found, Assume that Our Business made the mistake and the BANK records are accurate. 2) The Following Items were Included on the Bank Statement from the Schwab Bank for the Month as Follows; Ending Bank Balance at January 31 was $69,000. Monthly Bank Fees of $1,500 NSF Check from Customer H.Clinton for $11,000 Interest Earned During the month was...

Question