Business, 06.08.2021 17:50 122333444469

Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 127,000 units of each product. Its unit costs for each product at this level of activity are given below: Alpha Beta
Direct materials $40 $24
Direct labor 37 30
Variable manufacturing overhead 24 22
Traceable fixed manufacturing overhead 32 35
Variable selling expenses 29 25
Common fixed expenses 32 27

Total cost per unit $194 $163

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. Assume that Cane expects to produce and sell 97,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy 12,000 additional Alphas for a price of $88 per unit; however pursuing this opportunity will decrease Alpha sales to regular customers by 7,000 units.

Required:
If Cane accepts the customerâ€™s offer, how much will its profits increase or decrease?

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 22:00

If a bond is issued at a premium the effective interest rate is most likely

Answers: 2

Answer

Business, 22.06.2019 04:50

Neveready flashlights inc. needs $317,000 to take a cash discount of 3/15, net 70. a banker will loan the money for 55 days at an interest cost of $13,200. a. what is the effective rate on the bank loan? (use a 360-day year. do not round intermediate calculations. input your answer as a percent rounded to 2 decimal places.) b. how much would it cost (in percentage terms) if the firm did not take the cash discount but paid the bill in 70 days instead of 15 days? (use a 360-day year. do not round intermediate calculations. input your answer as a percent rounded to 2 decimal places.) c. should the firm borrow the money to take the discount? no yes d. if the banker requires a 20 percent compensating balance, how much must the firm borrow to end up with the $317,000? e-1. what would be the effective interest rate in part d if the interest charge for 55 days were $7,200?

Answers: 3

Answer

Business, 22.06.2019 12:30

In the 1970s, kmart used blue light specials to encourage customers to flock to a particular department having a temporary sale. a spinning blue light activated for approximately 30 seconds, and then an in-store announcement informed shoppers of the special savings in the specific department. over time, loyal kmart shoppers learned to flock to the department with the spinning blue light before any announcement of special savings occurred. if kmart was employing classical conditioning techniques, what role did the spinning blue light play?

Answers: 3

Answer

Business, 22.06.2019 21:50

scenario: hawaii and south carolina are trading partners. hawaii has an absolute advantage in the production of both coffee and tea. the opportunity cost of producing 1 pound of tea in hawaii is 2 pounds of coffee, and the opportunity cost of producing 1 pound of tea in south carolina is 1/3 pound of coffee. which of the following statements is true? a. south carolina should specialize in the production of both tea and coffee. b. hawaii should specialize in the production of tea, whereas south carolina should specialize in the production of coffee. c. hawaii should specialize in the production of coffee, whereas south carolina should specialize in the production of tea. d. hawaii should specialize in the production of both tea and coffee.

Answers: 1

Answer

You know the right answer?

Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respective...

Questions