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Cane Company manufactures two products called Alpha and Beta that sell for $ 2 4 0 and $ 1 6 2 , respectively. Each product

Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 131,000 units of each product. Its average cost per unit for each product at this level of activity are given below:
Alpha Beta
Direct materials $ 35 $ 15
Direct labor 4823
Variable manufacturing overhead 2725
Traceable fixed manufacturing overhead 3538
Variable selling expenses 3228
Common fixed expenses 3530
Total cost per unit $ 212 $ 159
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 100,000 units of Alpha and 80,000 units of Beta. Also assume that the raw material available for production is limited to 261,000 pounds. What is the total contribution margin Cane Company will earn?

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