Hello, so I'd like help on solving this problem for practicing for my accounting exam. The question and solution (#13) will be attached but please put into good detail on how to solve this problem and how the numbers got there (like the 8,000 units for Alpha and 40,000 units for Beta because I am confused on how that got there) Please and thank you!
EIX Mai 15 [Read mucmmme gym 9 PF d v AaBbu AaBbu AaBbc AaBch] Aalj AaBchE AuBch AuBch AuBch AaBch Aasba AaBbG AAEECcl AABch AaBbC( . \"gm, WNormai IiNoSpa( Heading]. Heading} Title gimme SubtieEm. Emphasi: lnlenseE Strong Quote lntenSeQ.. Suntieiiar. lntenSeRe. EookTitia : kkimv cupuaam r. rm r, Paragraph r, Style; r. Eamng A Hounds or direct materials per unit (a) + (n) ......... b 2 \" 3&5 D Ea Copy Past: 7 v i FormatPairiker B I E 12. The contribution margins per pound of raw materials are computed as follows: Alpha Beta Selling price per unit ............................. $120 $80 Variable cost per unit ............................ Contribution margin per unit (a) ............. Q g Pounds of direct material required to produce one unit (b) ........................... 5 pounds 2 pounds Contribution margin per pound (a) + (b) $10.20 $20.00 per per pound pound 13. The optimal number of units to produce would be computed as .follows: Pounds Units Total Product Per Unit Produced Pounds 2 60,000 120,000 5 8,000 40 000 Total pounds available ......... 160,000 D The company should produce Beta rst because it earns the highest contribution margin per pound of raw materials. After customer demand for Beta has been satised by producing 60,000 units, there are 40,000 pounds of raw materials remaining to use for making Pageiuf noswums [a g a .4+ 164% \" FiPr E ii wg chapn Rum-1am... wg ChapEFwnda E {IN RF Fie Founaational ' 5 .1. LOIZrzg, Lomrag , L0124g. L012$g , Lm24sg Can; Cvmpany manufacmxas ma 93)de undAlpba ma Em am sall for 5120 mi $80,105pcavnly,&nh pmdm um mly an: type omw mam-ml mm was 56 perpmmi Th: wmpany tun me anyway In annually [unduce 100,000 1|me afict: [msducL [1.5 lvcmg: cmlpcr unitfm ma; product .1 am lcwcl 01' activity .m givcn ham: Alpha meta DTved malenals s 30 :12 DTVEIII Iahol 2!] I5 Variable mammal-ring warhead 7 5 Tmmahle xed mauu'aaung memead I6 18 Variab'eselling Expenses 12 a cammonma expensa j J man can peruml m E 11:: company condm ms numb); Excd mnnichlnng wmd ml): lvmdahln, whm its mmnm xnd magnum an: \\I'lldlbl: andimvtham allocated to pub-m hum an \"In: dnLlAls inquired: (Anna: and: qucsuml indwmdmily unit-$5 insmmmd mlmxwm) 1 WI is 0:: mm nmmlnl nf tunable 5m] [Emil-Em; nmhad Em me): am: Nu pmdllcts? 2 Whit um: mpgny'z mm mount Dfunmmm xed cap-nus? 3 Axum]: mm Cu: unpacks m produce and .0 30,000 Alpha during 0:: cumlyw On: uf Cm': salts qummvcs rm found 41 um cuslumcr wha u mung to buy 10,000 m'lduinnnl Alphas furnprio: ofSEDpa'uml mm 1; m: mmal adv-mg: (chindvmhgc) ofmcpmg 3mm cushxnn's W7 4 Assam: le Cane mum pmaum and .0 90,000 Em dlmng Lb: annual ya; 0:: of Cnnc's 531m xqucxmrahvas has funnel a m 2113thth n walling us buy immune: Hem fly! nymx HE 339 perumt Whnli: me Emanunl ndvmtnge (dizzdvnulngt) u: neccpnng (a: ntu' cumm's urdcz? 5 Axum: mm Cu: unpacks m produce and ml 95,000 Alpha during 0:: cumlyw On: uf Cm': salts qummves rm [and a um Eastman win 15 mnmg 00 buy 10,000 mammal Alphu [am print: Df$$DpdnmL hnwcvm gunning [bu uppmmmly mu Elwyn: Alpha \"In: mmgulm mmm by 5,000 nun: Whnus m: 11211:an ndvnmage (disadvmugq at mctpngx ncw ulxlamn's mdu? 5 Aswan am Can: nmmlly pruduu: and sells 900000 Benn pt: ya: mm 1: m: Emma] advantage W (disadvantage) a! magma-mug Lb: Em pmdm 1m? 7 Axum: am lecnmmally pmdum and ml; 40,000 Em: pa ym Mm ii an nnnrjnl ndvanmgc (diudvanmgc) of dmswnnung the Em ymduct 1m? 0 Assumc um Cmunmuny pmdums and all; 50,000 Em and 00000131th 1):ch LfCanc mm; 1h: Em product mm, m 5515: [epicsmmhval mud inclus: was a: A190, by 15,000 units W u m: 5mm] advantage (diudvmge) a! 9. 10. 11. 12. 13. 14. 15. Assume that Cane expects to produce and sell 80,000 Alphas during the current year. A supplier has offered to manufacture and deliver 80,000 Alphas to Cane for a price of $80 per unit. What is the financial advantage (disadvantage) of buying 80,000 units from the supplier instead of making those units? Assume that Cane expects to produce and sell 50,000 Alphas during the current year. A supplier has offered to manufacture and deliver 50,000 Alphas to Cane for a price of $80 per unit. What is the financial advantage (disadvantage) of buying 50,000 units from the supplier instead of making those units? How many pounds of raw material are needed to make one unit of each of the two products? What contribution margin per pound of raw material is earned by each of the two products? Assume that Cane's customers would buy a maximum of 80,000 units of Alpha and 60,000 units of Beta. Also assume that the raw material available for production is limited to 160,000 pounds. How many units of each product should Cane produce to maximize its profits? If Cane follows your recommendation in requirement 13, what total contribution margin will it earn? If Cane uses its 160,000 pounds of raw materials as you recommended in requirement 13, up to how much should it be willing to pay per pound for additional raw materials
