ssume that Cane expects to produce and sell pplier has offered to manufacture and deliver 80,000 Alphas to Cane for a price of SH0 per unit. What is the financial advantage (disadvantage) of buying 80,000 units from the supplier instead of making those units? 10. Assume that Cane expects to produce and sell 50,000 Alphas during the current year A plher has offered to manufacture and deliver 50,000 Alphas to Cane for a price of S80p- unit. What is the financial advantage (disadvantage) of buying 50,000 units from the supplier instead of making those units? 11. How many pounds of raw material pre needed to make one unit of each of the two produeee 12. What contribution margin per pound of raw material is earned by each of the two produeten 13. Assume that Cane's customers would buy a maximum of 80,000 units of Alpha and 60 units of Beta. Also assume that the raw material available for production is limited to 160,000 pounds, How many units of each product should Cane produce to maximize its profits? 14. If Cane follows your recommendation in requirement 13, what total contribution margin will it 15. If Cane uses its 160,000 pounds of raw materials as you recommended in requirement 13, up to how much should it be willing to pay per pound for additional raw materials? connect EXERCISE 12-1 Identifying Relevant Costs LO12-1 Svahn, AB, is a Swedish manufacturer of sailing yachts. The company has assembled the informati shown below that pertains to two independent decision-making contexts called Case A and Case R- Case A: The company chronically has no idle capacity and the old Model B100 machine is the companyte constraint. Management is considering purchasing a Model B300 machine to use in addition to the company's present Model B100 machine. The old Model B100 machine will continue to be used to capacity as before, with the new Model B300 machine being used to expand production. This will increase the company's production and sales. The increase in volume will be large enough to require increases in fixed selling expenses and in general administrative overhead, but not in the fixed manufacturing overhead Case B: The old Model B100 machine is not the company's constraint, but management is considering replacing it with a new Model B300 machine because of the potential savings in direct materials with the new machine. The Model B100 machine would be sold. This change will have no effect on production or sales, other than some savings in direct materials costs due to less waste. Required: Copy the information below onto your answer sheet and place an X in the appropriate column to indi- cate whether each item is relevant or irrelevant to the decision context described in Case A and Case B Case B Case A Irrelevant Relevant Irrelevant Relevant Item a. Sales revenue b. Direct materials C. Direct labor.. d. Variable manufacturing overhead e. Depreciation-Model B100 machine. Book value-Model B100 machine f. g. Disposal value-Model B100 machine. h. Market value-Model B300 machine (cost) Fixed manufacturing overhead (general). Variable selling expense i. j. k. Fixed selling expense.. 1. General administrative overhead.