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Cane Company manufactures two products called Alpha and Beta that sell for $ 1 4 0 and $ 1 0 0 , respectively. Each product

Cane Company manufactures two products called Alpha and Beta that sell for $140 and $100, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 106,000 units of each product. Its average cost per unit for each product at this level of activity are given below:
Alpha Beta
Direct materials $ 32 $ 16
Direct labor 2419
Variable manufacturing overhead 109
Traceable fixed manufacturing overhead 2022
Variable selling expenses 1612
Common fixed expenses 1914
Total cost per unit $ 121 $ 92
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.
14. Assume that Canes customers would buy a maximum of 84,000 units of Alpha and 64,000 units of Beta. Also assume that the raw material available for production is limited to 166,000 pounds. What is the total contribution margin Cane Company will earn?

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