Assume that Cane expects to produce and sell 97,000 Alphas during the current ye
ID: 2462576 • Letter: A
Question
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 that is willing to buy 12,000 additional Alphas for a price of $88 per unit. If Cane accepts the customer’s offer, it will decrease Alpha sales to regular customers by 7,000 units. Calculate the incremental net operating income if the order is accepted? (Loss amount should be indicated with a minus sign.)
Assume that Cane expects to produce and sell 82,000 Alphas during the current year. A supplier has offered to manufacture and deliver 82,000 Alphas to Cane for a price of $88 per unit. If Cane buys 82,000 units from the supplier instead of making those units, how much will profits increase or decrease?
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. If Cane buys 52,000 units from the supplier instead of making those units, how much will profits increase or decrease?
11. How many pounds of raw material are needed to make one unit of Alpha and one unit of Beta?
What contribution margin per pound of raw material is earned by Alpha and Beta? (Round your answers to 2 decimal places.)
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 company’s raw material available for production is limited to 162,000 pounds. How many units of each product should Cane produce to maximize its profits?
14. 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 company’s raw material available for production is limited to 162,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?
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 company’s raw material available for production is limited to 162,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)
5.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 that is willing to buy 12,000 additional Alphas for a price of $88 per unit. If Cane accepts the customer’s offer, it will decrease Alpha sales to regular customers by 7,000 units. Calculate the incremental net operating income if the order is accepted? (Loss amount should be indicated with a minus sign.)
9.Assume that Cane expects to produce and sell 82,000 Alphas during the current year. A supplier has offered to manufacture and deliver 82,000 Alphas to Cane for a price of $88 per unit. If Cane buys 82,000 units from the supplier instead of making those units, how much will profits increase or decrease?
10.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. If Cane buys 52,000 units from the supplier instead of making those units, how much will profits increase or decrease?
11. How many pounds of raw material are needed to make one unit of Alpha and one unit of Beta?
12.What contribution margin per pound of raw material is earned by Alpha and Beta? (Round your answers to 2 decimal places.)
13.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 company’s raw material available for production is limited to 162,000 pounds. How many units of each product should Cane produce to maximize its profits?
14. 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 company’s raw material available for production is limited to 162,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?
15.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 company’s raw material available for production is limited to 162,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)
Explanation / Answer
Solution 5:
Incremental net operating income if the order is accepted = ($244,000)
Solution 9:
If company buys alpha from outside supplier instead of making it then profit will decrease by $132,000
Solution 10:
If company buys alpha from outside supplier instead of making it then profit will increase by $588,000
Solution 11:
Raw material requirement per unit of alpha = Cost per unit / Raw material cost per pound = $25 / $5 = 5 pound
Raw material requirement per unit of Beta = Cost per unit / Raw material cost per pound = $10 / $5 = 2 pound
Solution 12:
Note: I have answered more than required parts as per chegg policy, kindly post separate question for answer of remaining parts.
Differential Analysis - Regular sale alpha (alt 1)or accept special alpha order (Alt2) Particulars Regular Sale (97000 Units)(Alt 1) Accept special alpha order (Regular Sale - 90000 Units, Special Order - 12000 Units) Differential effect on income (Alt 2) Details Amount Details Amount Revenue 97000*$130 $12,610,000.00 (90000*$130) + (12000*88) $12,756,000.00 $146,000.00 Costs: Direct Material 97000*$25 $2,425,000.00 102000*$25 $2,550,000.00 $125,000.00 Direct Labor 97000*$22 $2,134,000.00 102000*$22 $2,244,000.00 $110,000.00 Variable manufacturing Overhead 97000*$17 $1,649,000.00 102000*$17 $1,734,000.00 $85,000.00 Variable Selling Expenses 97000*$14 $1,358,000.00 102000*$14 $1,428,000.00 $70,000.00 Traceable Fixed manufacturing overhead 102000*$18 $1,836,000.00 102000*$18 $1,836,000.00 $0.00 Common fixed expenses 102000*$17 $1,734,000.00 102000*$17 $1,734,000.00 $0.00 Income / (Loss) $1,474,000.00 $1,230,000.00 -$244,000.00
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