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Liono4ka [1.6K]
3 years ago
8

Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only on

e type of raw materlal that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its average cost per unit for each product at this level of activity are given below:
Alpha Beta
Direct materials $25 $10
Direct labor 22 21
Variable manufacturing overhead 17 7
Traceable fixed manufacturing overhead 18 20
Variable selling expenses 14 10
Common fixed expenses 17 12
Total cost per unit $113 $80


The company considers its traceable fixed manufacturing overhead to be avoldable, whereas its common fixed expenses are unavoldable and have been allocated to products based on sales dollars.

a. Assume that Cane expects to produce and sell 52,000 Alphas during the current year. A supplier has offered to manufacture and deliver 52,000 Alphas to Cane for a price of $88 per unit. What is the financial advantage (disadvantage) of buying 52,000 units from the supplier instead of making those units?
b. Assume that Cane's customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the raw material available for production is limited to 162,000 pounds. How many units of each product should Cane produce to maximize its profits? Units produced for Alpha? Units produced for Beta?
c. Assume that Cane's customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the raw material available for production is limited to 162,000 pounds. What total contribution margin will it earn?
d. Assume that Cane's customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the raw material available for production is limited to 162,000 pounds. If Cane uses its 162,000 pounds of raw materials, up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)
Business
1 answer:
lyudmila [28]3 years ago
7 0

Answer:

Explanation:

a. Raw material needed to make one unit

Alpha = 25/5 = 5 Pound

beta = 10/5 = 2 Pound

b.  Contribution margin per pound

                                                                         Alpha Beta

Selling price                                                   130 90

Direct material                                            25 10

Direct labor                                                    22 21

Variable manufacturing overhead              17 7

Variable selling expenses                              14 10

Contribution margin per unit                     52 42

pound per unit                                               5 2

Contribution pound per pound                   10.4 21

c. product mix

Pound Unit

Beta 62000*2 = 124000 62000

Alpha 38000 38000/5 = 7600

Total 162000  

d.  Maximum contribution margin = (62000*42+7600*52) = $2999200

e.  Highest price = 10.4+5 = 15.40 per pound

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olya-2409 [2.1K]

Answer:

1. Tastes and Preferences of the Consumers

2. Income of the People

3. Changes in Prices of the Related Goods

4. Advertisement Expenditure

5. The Number of Consumers in the Market

6. Consumers’ Expectations with Regard to Future Prices

Explanation:

4 0
3 years ago
Tax laws permit installment sales, which are recognized in the year of sale for financial reporting purposes, to be reported in
Lera25 [3.4K]

Answer:

lower; higher.

Explanation:

Taxation can be defined as the involuntary or compulsory fees levied on individuals or business entities by the government to generate revenues used for funding public institutions and activities.

The different types of tax include the following;

1. Income tax: a tax on the money made by workers in the state. This type of tax is paid by employees with respect to the amount of money they receive as their wages or salary.

2. Property tax: a tax based on the value of a person's home or business. It is mainly taxed on physical assets or properties such as land, building, cars, business, etc.

3. Sales tax: a tax that is a percent of the price of goods sold in retail stores. It is being paid by the consumers (buyers) of finished goods and services and then, transfered to the appropriate authorities by the seller.

Generally, installment sales are permitted or allowed by the tax laws in a country. Typically, they are recognized in the year of sale for the purpose of financial reporting. Also, installment sales for any goods or services are to be reported in the tax return, at a later time when cash is received from the customer (buyer).

This results in a deferred tax liability because taxable income is lower than financial income in the year of sale, and higher than financial income in later years when collected.

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2 years ago
If an economy is producing at a point on its production possibilities frontier, it is: a.efficient in production and allocation.
irinina [24]

Answer:

d.efficient in production but not necessarily in allocation.

Explanation:

The production possibility curve portrays the cost of society's choice between two different goods. An economy that operates at the frontier has the highest standard of living it can achieve, as it is producing as much as it can using the same resources. If the amount produced is inside the curve, then all of the resources are not being used.

- all points on the curve are points of maximum productive efficiency

- However, an economy may achieve productive efficiency without necessarily being allocatively efficient. Market failure (such as imperfect competition or externalities) and some institutions of social decision-making (such as government and tradition) may lead to the wrong combination of goods being produced (hence the wrong mix of resources being allocated between producing the two goods) compared to what consumers would prefer, given what is feasible on the PPF.

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2 years ago
As part of your plan to lead the change effort to increase team productivity, you want to build momentum by generating short-ter
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Answer: Visible to senior leadership but not lower levels of the organization

Explanation:

Most short term wins are not visible to senior leadership, but are obvious to lower levels of the organization. The senior leadership wants results at the end of a business day and may not recognize the efforts that have been put in place by lower level of the organization for the progress that is noticeable so far.

3 0
3 years ago
Western Union is in the business of providing a medium for international money transfers. Through the services of Western Union,
tatiyna

Answer: core service

                                                 

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