Questons 1-15 (of 20)> The following informetion applies to the questlons displa
ID: 2522840 • Letter: Q
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Questons 1-15 (of 20)> The following informetion applies to the questlons displayed below Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respecovely. Each product uses only one type of raw material that costs $6 per pound. The company has the capecity to annually produce 100,000 units of each product. its unit costs for each product at this level of activity are given below Alpha Beta 30 $12 Direct materials Direct labor Vanable manufacturing overhead Traceable fixed manufacturing overheed Varnable selling expenses Common fuxed expenses 16 18 128 15 10 Total cost per unt $100 $68 The company considers its troceable foxed manufactuning overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been alocated to products based on sales dolilars O Type here to search 2 3 4 6 WE RTYU ASIDF GHJ KExplanation / Answer
Cane Company ($) ($) Alpha Beta Direct Materials 30 12 Direct Labor 20 15 Variable Manufacturing Overhead 7 5 Traceable fixed manufacturing overhead (Avoidable) 16 18 Variable selling expenses 12 8 Common fixed expenses (Unavoidable) 15 10 Total cost per unit $ 100 $ 68 Selling Price $ 120 $ 80 Annual Capacity (Units) 100000 100000 9). Statement showing calculation of total cost and profit (ALPHA) Costs /Activity Level (Units) Per Unit 100000 80000 50000 Direct Materials 30 3,000,000 2,400,000 1,500,000 Direct Labor 20 2,000,000 1,600,000 1,000,000 Variable Manufacturing Overhead 7 700,000 560,000 350,000 Variable selling expenses 12 1,200,000 960,000 600,000 Traceable fixed manufacturing overhead (Avoidable) 16 1,600,000 1,280,000 800,000 Total Cost 8,500,000 6,800,000 4,250,000 Sales 120 12,000,000 9,600,000 6,000,000 Profit 3,500,000 2,800,000 1,750,000 If 80000 Alpha purchased at $80 PU Sales ($120*80000) 9,600,000 Cost ($80*80000) 6,400,000 3,200,000 Change in profits Increase by (3200000-2800000) $400,000 10). If 50000 Alpha purchased at 80 PU Sales ($120*50000) 6,000,000 Cost ($80*50000) 4,000,000 2,000,000 Change in profits Increase by (200000-1750000) $250,000 11). Direct Material cost per unit (A) $ 30.00 $ 12.00 Raw material cost per pound (B) 6 6 Raw Material Required per unit (in pounds) (A)/(B) 5 2
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