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[The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respectively.

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

Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 127,000 units of each product. Its average cost per unit for each product at this level of activity are given below:

Alpha Beta
Direct materials $ 40 $ 24
Direct labor 37 30
Variable manufacturing overhead 24 22
Traceable fixed manufacturing overhead 32 35
Variable selling expenses 29 25
Common fixed expenses 32 27
Total cost per unit $ 194 $ 163

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.

13. Assume that Canes customers would buy a maximum of 97,000 units of Alpha and 77,000 units of Beta. Also assume that the raw material available for production is limited to 247,000 pounds. How many units of each product should Cane produce to maximize its profits?

14. Assume that Canes customers would buy a maximum of 97,000 units of Alpha and 77,000 units of Beta. Also assume that the raw material available for production is limited to 247,000 pounds. What total contribution margin will it earn?

15. Assume that Canes customers would buy a maximum of 97,000 units of Alpha and 77,000 units of Beta. Also assume that the raw material available for production is limited to 247,000 pounds. If Cane uses its 247,000 pounds of raw materials, up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)

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