This is all one huge question because it all stems from the

This is all one huge question because it all stems from the same information. That is why I am posting it altogether.

Cane Company manufactures two products called Alpha and Beta that sell for $180 and $145, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 118,000 units of each product. Its unit costs for each product at this level of activity are given below:

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.

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 overhead

2. What is the company’s total amount of common fixed expenses?

Total common fixed expenses=

3. Assume that Cane expects to produce and sell 92,000 Alphas during the current year. One of Cane\'s sales representatives has found a new customer that is willing to buy 22,000 additional Alphas for a price of $128 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 102,000 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 $60 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 107,000 Alphas during the current year. One of Cane\'s sales representatives has found a new customer that is willing to buy 22,000 additional Alphas for a price of $128 per unit. If Cane accepts the customer’s offer, it will decrease Alpha sales to regular customers by 11,000 units.

Calculate the incremental net operating income if the order is accepted? (Loss amount should be indicated with a minus sign.)

Incremental net operating income=

Based on your calculations above should the special order be accepted

6. Assume that Cane normally produces and sells 102,000 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 52,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?

Profit _____ by _____

8. Assume that Cane normally produces and sells 72,000 Betas and 92,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 12,000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease?

Profit _____ by _____

9. Assume that Cane expects to produce and sell 92,000 Alphas during the current year. A supplier has offered to manufacture and deliver 92,000 Alphas to Cane for a price of $128 per unit. If Cane buys 92,000 units from the supplier instead of making those units, how much will profits increase or decrease?

Profit _____ by _____

10. Assume that Cane expects to produce and sell 62,000 Alphas during the current year. A supplier has offered to manufacture and deliver 62,000 Alphas to Cane for a price of $128 per unit. If Cane buys 62,000 units from the supplier instead of making those units, how much will profits increase or decrease?

Profit _____ by _____

11. How many pounds of raw material are needed to make one unit of Alpha and one unit of Beta?

Alpha Beta

Pounds of raw materials per unit

12. What contribution margin per pound of raw material is earned by Alpha and Beta? (Round your answers to 2 decimal places.)

Alpha Beta

Contribution margin per pound

13. Assume that Cane’s customers would buy a maximum of 92,000 units of Alpha and 72,000 units of Beta. Also assume that the company’s raw material available for production is limited to 300,000 pounds. How many units of each product should Cane produce to maximize its profits?

Alpha Beta

Units produced

14. Assume that Cane’s customers would buy a maximum of 92,000 units of Alpha and 72,000 units of Beta. Also assume that the company’s raw material available for production is limited to 300,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?

Total contribution margin=

15. Assume that Cane’s customers would buy a maximum of 92,000 units of Alpha and 72,000 units of Beta. Also assume that the company’s raw material available for production is limited to 300,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)

Maximum price to be paid per pound=

[The following information applies to the questions displayed below.]

Solution

Answer 1. Traceable Fixed MOH Alpha - $27 X 118,000 Units                  3,186,000 Beta - $30 X 118,000 Units                  3,540,000 Answer 2. Company\'s Total Common Fixed Expenses Alpha - $27 X 118,000 Units                  3,186,000 Beta - $22 X 118,000 Units                  2,596,000 Total Common Fixed Exp.                  5,782,000 Answer 3. Statement of Incremental Profit If order is Accepted of Alpha - 22,000 Units Particulars Amount Increase in Sales (22,000 Units X $128)                   2,816,000 Less: Increase in Costs Variable Cost Direct Material (22,000 Units X $36)                    (792,000) Direct Labour (22,000 Units X $32)                    (704,000) Variable MOH (22,000 Units X $19)                    (418,000) Variable Selling Exp. (22,000 Units X $24)                    (528,000)                 (2,442,000) Incremental Profit / (Loss)                       374,000 Profit will be increased by $374,000, if order is Accepted. Note: We assumed that Variable Selling exp. Will be incurred on the Special order ia Accepted. Answer 4. Statement of Incremental Profit If order is Accepted of Beta - 4,000 Units Particulars Amount Increase in Sales (4,000 Units X $60)                       240,000 Less: Increase in Costs Variable Cost Direct Material (4,000 Units X $24)                      (96,000) Direct Labour (4,000 Units X $27)                    (108,000) Variable MOH (4,000 Units X $17)                      (68,000) Variable Selling Exp. (4,000 Units X $20)                      (80,000)                    (352,000) Incremental Profit / (Loss)                    (112,000) Profit will be decreased by $112,000, if order is Accepted. Note: We assumed that Variable Selling exp. Will be incurred on the Special order ia Accepted. As per Chegg Guidelines, you can ask one question having four sub-parts only.