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zhenek [66]
4 years ago
10

Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only on

e type of raw material that costs $6 per pound. The company has the capacity to annually produce 101,000 units of each product. Its average cost per unit for each product at this level of activity are given below:
Alpha Beta
Direct materials $ 30 $12
Direct labor 21 20
Variable manufacturing overhead 8 6
Traceable fixed manufacturing overhead 17 19
Variable selling expenses 13 9
Common fixed expenses 16 11
Total cost per unit $105 $77

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

Questions: 5. Assume that Cane expects to produce and sell 96,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 11,000 additional Alphas for a price of $84 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 6,000 units.

(a) What is the financial advantage (disadvantage) of accepting the new customer’s order?
(b) Based on your calculations above should the special order be accepted?
Business
1 answer:
Lana71 [14]4 years ago
6 0

Answer:

disadvatageous for 126,000 dollars

It should be rejected.

Explanation:

\left[\begin{array}{cccc}&$Units&$Cost&$Total\\$Special Order&11,000&84&924,000\\$Variable Cost&11,000&-60&-660,000\\$Rejected local&-6000&65&-390,000\\Net Income&&&-126,000\\\\\end{array}\right]

The units will generate revenue for 924,000

but will take variable cost for 60 units each thus: 660,000 cost

Also accepting this order has the opportunity cost of resing to the contribution of 6,000 units in the local market:

normal contribution: 125 - 60 = 65

opportunity cost: 6,000 x 65 = 390,000

This makes the order disadvatageous for 126,000 dollars

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lesya [120]

Answer:

Total cost= $930

Explanation:

Giving the following information:

Copy Center pays an average wage of $12 per hour.

Overhead rate= $18 per direct labor hour

Job M-47:

used $330 of direct materials and took 20 direct labor hours of labor to complete.

Total cost= direct material + direct labor + allocated overhead

Total cost= 330 + 20*12 + 20*$18= $930

3 0
3 years ago
4) Double-declining-balance depreciation: A) is an accelerated depreciation method. B) ignores the residual value in computing d
Oxana [17]

Answer:

Option D is correct.

Explanation:

Every single offered proclamation are right is the response in light of the fact that under the Double-declining-balance depreciation since it has more devaluation costs when contrasted with different strategies for depreciation.It isn't taking the leftover worth while figuring the deterioration it considers at end year depreciation is determined by taking the distinction of a year ago equalization and rescue value.Under this strategy deterioration is determined on balance measure of depreciation or book value of assets.

4 0
3 years ago
Current operating income for Bay Area Cycles Co. is $34,000. Selling price per unit is $100, the contribution margin ratio is 25
leonid [27]

Answer:

break even point in unit =5440 units

break even point in sales = $544000

total sale = $680000

Explanation:

given data

Current operating income = $34,000

Selling price = $100

margin ratio = 25%

to find out

Bay Area Cycle’s break even point in units and total sales dollars

solution

we get here first break even point that is express as

break even point in unit =  \frac{fixed\ cost}{contribution\ per\ unit}   ..................1

break even point in unit =  \frac{136000}{100*0.25}

break even point in unit =5440 units

so

break even point in sales =  \frac{fixed\ cost}{margin\ ratio}   ..................2

break even point in sales = \frac{136000}{0.25}

break even point in sales = $544000

and

total sales will be

total sale =  \frac{operating\ income+ fixed\ expense}{margin\ ratio}   ..................3

total sale =  \frac{34000+136000}{0.25}

total sale = $680000

3 0
3 years ago
A company started the year with "$185,000 of goods finished" and ready for sale. During the year, a total of $700,000 of goods w
gulaghasi [49]

Answer:

$110,000

Explanation:

The closing balance in the finished goods inventory account is a function of the opening balance and the net movement that occurred during the year.

As such, the closing balance

= opening balance + purchases/production - sales

Given;

opening balance = $185,000

purchases/production = $550,000

sales = $625,000

Therefore,

closing balance in the finished goods = $185,000 + $550,000 - $625,000

= $110,000

6 0
3 years ago
Ian Sanders offered to sell his car to Beth Jones for $5,000. Subsequently, Beth demanded that he provide new seat covers for th
Sergeeva-Olga [200]

This question is incomplete because the options are missing; here is the complete questions:

Ian Sanders offered to sell his car to Beth Jones for $5,000. Subsequently, Beth demanded that he provide new seat covers for the car as she was paying a rather heavy price for the car. Beth's response represents a(n) ________.

A. Inquiry regarding terms

B. Rejection of the offer

C. Conditional acceptance of the offer

D. Additional term

The correct answer to this question is D. Additional term

Explanation:

In a contract, the terms refer to the specific conditions or obligations the parties involved accept. These terms are usually registered in a document as not following the terms has legal consequences. In the case presented, the answer of Beth represents an additional term because the purpose of her answer is to include a new condition or obligation that the seller of the car should accomplish as part of the agreement between seller and buyer.

3 0
3 years ago
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