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Required information The Foundational 1 5 ( Algo ) [ LO 1 3 - 2 , LO 1 3 - 3 , LO 1 3

Required information The Foundational 15(Algo)[LO13-2, LO13-3, LO13-4, LO13-5, LO13-6] Skip to question [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $195 and $150, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 123,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Alpha Beta Direct materials $ 40 $ 15 Direct labor 3428 Variable manufacturing overhead 2220 Traceable fixed manufacturing overhead 3033 Variable selling expenses 2723 Common fixed expenses 3025 Total cost per unit $ 183 $ 144 The companys traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Foundational 13-15(Algo)15. Assume Canes customers would buy a maximum of 95,000 units of Alpha and 75,000 units of Beta. Also assume the companys raw material available for production is limited to 245,000 pounds. If Cane uses its 245,000 pounds of raw materials, up to how much should it be willing to pay per pound for additional raw materials?

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