Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information Skip to question [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell

Required information

Skip to question

[The following information applies to the questions displayed below.]

Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101,000 units of each product. Its average cost per unit for each product at this level of activity are given below:

Alpha Beta
Direct materials $ 30 $ 12
Direct labor 21 20
Variable manufacturing overhead 8 6
Traceable fixed manufacturing overhead 17 19
Variable selling expenses 13 9
Common fixed expenses 16 11
Total cost per unit $ 105 $ 77

The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars.

12. What contribution margin per pound of raw material is earned by each of the two products? (Round your answers to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Effective Auditing For Corporates Ensuring That All The Risks Are Covered

Authors: Bloomsbury, Joe Oringel

1st Edition

1849300445, 978-1849300445

More Books

Students also viewed these Accounting questions

Question

8. Describe how cultural spaces are formed.

Answered: 1 week ago