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Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material

Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 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 29 25
Variable manufacturing overhead 15 14
Traceable fixed manufacturing overhead 25 27
Variable selling expenses 21 17
Common fixed expenses 24 19
Total cost per unit $ 154 $ 126

Part 1: How many pounds of raw material are needed to make one unit of each of the two products?

Alpha Beta
Pounds of raw materials per unit

Part 2: What contribution margin per pound of raw material is earned by each of the two products? (Round your answers to 2 decimal places.)

Part 3: Assume that Canes customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta. Also assume that the raw material available for production is limited to 220,000 pounds. How many units of each product should Cane produce to maximize its profits?

Part 4: Assume that Canes customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta. Also assume that the raw material available for production is limited to 220,000 pounds. What is the total contribution margin Cane Company will earn?

Part 5: Assume that Canes customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta. Also assume that the raw material available for production is limited to 220,000 pounds. What is the total contribution margin Cane Company will earn?

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