13. Assume that Canes customers would buy a maximum of 96,000 units of Alpha and 76,000 units of Beta. Also assume that the raw material available for production is limited to 246,000 pounds. How many units of each product should Cane produce to maximize its profits?

14. Assume that Canes customers would buy a maximum of 96,000 units of Alpha and 76,000 units of Beta. Also assume that the raw material available for production is limited to 246,000 pounds. What total contribution margin will it earn?

Item15

Part 15 of 15

1points

eBook

Print

References

Check my workCheck My Work button is now enabled

Item15

Item 15 Part 15 of 15 1 points

Required information

The Foundational 15 [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6]

[The following information applies to the questions displayed below.]

Cane Company manufactures two products called Alpha and Beta that sell for $215 and $160, respectively. Each product uses only one type of raw material that costs $7 per pound. The company has the capacity to annually produce 125,000 units of each product. Its average cost per unit for each product at this level of activity are given below:

	Alpha				Beta
Direct materials		$	42			$	21
Direct labor			35				28
Variable manufacturing overhead			23				21
Traceable fixed manufacturing overhead			31				34
Variable selling expenses			28				24
Common fixed expenses			31				26
Total cost per unit		$	190			$	154

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.

Foundational 11-15

15. Assume that Canes customers would buy a maximum of 96,000 units of Alpha and 76,000 units of Beta. Also assume that the raw material available for production is limited to 246,000 pounds. If Cane uses its 246,000 pounds of raw materials, up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)

Required information The Foundational 15 [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6] [The following information applies to the questions displayed belowj Cane Company manufactures two products called Alpha and Beta that sell for $215 and $160, respectively. Each product uses only one type of raw material that costs $7 per pound. The company has the capacity to annually produce 125,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta $ 21 28 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit $ 42 35 23 31 28 31 $190 34 26 $154 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