! Required information 5 [The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $210 and $172, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 128,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha Beta $ 40 $ 24 38 34 25 23 33 36 30 26 33 28 $ 199 $ 171 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. 6. Assume that Cane normally produces and sells 108,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Required information
[The following information applies to the questions displayed below]
Cane Company manufactures two products called Alpha and Beta that sell for $210 and $172, respectively. Each product
uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 128,000
units of each product. Its average cost per unit for each product at this level of activity are given below.
Direct materials
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
Total cost per unit
Alpha
Beta
$ 40
$ 24
38
34
25
23
33
36
30
26
33
28
$199
$ 171
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.
6. Assume that Cane normally produces and sells 108,000 Betas per year. What is the financial advantage (disadvantage) of
discontinuing the Beta product line?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F163923a1-2820-4bb0-84dd-74d015b3a8a1%2F8e375d69-4e99-45b2-bd10-f3b5267d2600%2Fhfme2j3_processed.jpeg&w=3840&q=75)
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