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 average cost per unit 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 unavoidable and have been allocated to products based on sales dollars. 9. assume that cane expects to produce and sell 97,000 alphas during the current year. a supplier has offered to manufacture and deliver 97,000 alphas to cane for a price of $148 per unit. what is the financial advantage (disadvantage) of buying 97,000 units from the supplier instead of making those units?
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