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 unit costs 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 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 8 Assume that Cane normally produces and sells 69,000 Betas and 89,000 Alphas per year If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 13,000 units If Cane discontinues the Beta product line, how much would profits increase or decrease 9 Assume that Cane expects to produce and sell 89,000 Alphas during the current year A supplier has offered to manufacture and deliver 89,000 Alphas to Cane for a price of $116 per unit If Cane buys 89,000 units from the supplier instead of making those units, how much will profits increase or decrease 10 Assume that Cane expects to produce and sell 59,000 Alphas during the current year A supplier has offered to manufacture and deliver 59,000 Alphas to Cane for a price of $116 per unit If Cane buys 59,000 units from the supplier instead of making those units, how much will profits increase or decrease 11 How many pounds of raw material are needed to make one unit of Alpha and one unit of Beta 12 What contribution margin per pound of raw material is earned by Alpha and Beta (Round your answers to 2 decimal places ) 13 Assume that Canes customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta Also assume that the companys raw material available for production is limited to 220,000 pounds How many units of each product should Cane produce to maximize its profits 14 Assume that Canes customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta Also assume that the companys raw material available for production is limited to 220,000 pounds What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials 15 Assume that Canes customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta Also assume that the companys raw material available for production is limited to 220,000 pounds Up to how much should it be willing to pay per pound for additional raw materials (Round your answer to 2 decimal places )

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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 unit costs 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

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:

8.	Assume that Cane normally produces and sells 69,000 Betas and 89,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 13,000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease?

9.	Assume that Cane expects to produce and sell 89,000 Alphas during the current year. A supplier has offered to manufacture and deliver 89,000 Alphas to Cane for a price of $116 per unit. If Cane buys 89,000 units from the supplier instead of making those units, how much will profits increase or decrease?

10.

Assume that Cane expects to produce and sell 59,000 Alphas during the current year. A supplier has offered to manufacture and deliver 59,000 Alphas to Cane for a price of $116 per unit. If Cane buys 59,000 units from the supplier instead of making those units, how much will profits increase or decrease?

11.	How many pounds of raw material are needed to make one unit of Alpha and one unit of Beta?

12.	What contribution margin per pound of raw material is earned by Alpha and Beta? (Round your answers to 2 decimal places.)

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

14.

Assume that Canes customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta. Also assume that the companys raw material available for production is limited to 220,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?

15.

Assume that Canes customers would buy a maximum of 89,000 units of Alpha and 69,000 units of Beta. Also assume that the companys raw material available for production is limited to 220,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)