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Cane Company manufactures two products called Alpha and Beta that sell for $190 and $155, respectively. Each product uses only one type of raw material
Cane Company manufactures two products called Alpha and Beta that sell for $190 and $155, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 122,000 units of each product. Its unit costs for each product at this level of activity are given below: |
Alpha | Beta | |||||||
Direct materials | $ | 40 | $ | 24 | ||||
Direct labor | 34 | 28 | ||||||
Variable manufacturing overhead | 21 | 19 | ||||||
Traceable fixed manufacturing overhead | 29 | 32 | ||||||
Variable selling expenses | 26 | 22 | ||||||
Common fixed expenses | 29 | 24 | ||||||
Total cost per unit | $ | 179 | $ | 149 | ||||
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars. |
Required: |
What contribution margin per pound of raw material is earned by Alpha and Beta? (Round your answers to 2 decimal places.) |
Alpha | Beta | |
Contribution margin per pound | $ | $ |
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