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*** I HAVE NO IDEA! ANY HELP IS APRECIATED*** Cane Company manufactures two products called Alpha and Beta that sell for $150 and $105, respectively.

*** I HAVE NO IDEA! ANY HELP IS APRECIATED*** Cane Company manufactures two products called Alpha and Beta that sell for $150 and $105, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 107,000 units of each product. Its unit costs for each product at this level of activity are given below:

Alpha

Beta

Direct materials

$

30

$

10

Direct labor

25

20

Variable manufacturing overhead

12

10

Traceable fixed manufacturing overhead

21

23

Variable selling expenses

17

13

Common fixed expenses

20

15

Total cost per unit

$

125

$

91

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.

13.

Assume that Canes customers would buy a maximum of 85,000 units of Alpha and 65,000 units of Beta. Also assume that the companys raw material available for production is limited to 166,000 pounds. How many units of each product should Cane produce to maximize its profits?

14.

Assume that Canes customers would buy a maximum of 85,000 units of Alpha and 65,000 units of Beta. Also assume that the companys raw material available for production is limited to 166,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?

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