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ook int Cane Company manufactures two products called Alpha and Beta that sell for $135 and $95, respectively. Each product uses only one type
ook int Cane Company manufactures two products called Alpha and Beta that sell for $135 and $95, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 105,000 units of each product. Its average cost per unit for each product at this level of activity is given below. Alpha Beta ences Direct materials $ 30 $18 Direct labor Variable manufacturing overhead 23 16 10 8 Traceable fixed manufacturing overhead 19 21 Variable selling expenses 15 11 Common fixed expenses 18 13 $115 $87 Total cost per unit 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. 15. Assume Cane's customers would buy a maximum of 83,000 units of Alpha and 63,000 units of Beta. Also assume the company's raw material available for production is limited to 200,000 pounds. If Cane uses its 200,000 pounds of raw materials, up to how much should it be willing to pay per pound for additional raw materials? Note: Round your answer to 2 decimal places. Maximum price to be paid per pound
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