Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Cane Company manufactures two products called Alpha and Beta that sell for $185 and $120, respectively. Each product uses only one type of raw
Cane Company manufactures two products called Alpha and Beta that sell for $185 and $120, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 112,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 Beta 222222 $ 10 29 20 13 24 26 20 16 23 18 $ 139 $ 112 The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Foundational 13-13 (Algo) 13. Assume Cane's customers would buy a maximum of 88,000 units of Alpha and 68,000 units of Beta. Also assume the raw material available for production is limited to 172,000 pounds. How many units of each product should Cane produce to maximize its profits? Units produced Alpha Beta
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Okay lets break this down stepbystep Max customer demand 88000 units of Alpha 68000 u...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started