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Required information [ The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for
Required information
The following information applies to the questions displayed below.
Cane Company manufactures two products called Alpha and Beta that sell for $ and $ respectively. Each product
uses only one type of raw material that costs $ per pound. The company has the capacity to annually produce
units of each product. Its unit costs for each product at this level of activity are given below:
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.
Assume that Cane's customers would buy a maximum of units of Alpha and units of Beta. Also assume that the
company's raw material available for production is limited to pounds. What is the maximum contribution margin Cane
Company can earn given the limited quantity of raw materials?
Total contribution margin
Assume that Cane's customers would buy a maximum of units of Alpha and units of Beta. Also assume that the
company's raw material available for production is limited to pounds. Up to how much should it be willing to pay per pound
for additional raw materials? Round your answer to decimal places.
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