! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $185 and $120, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 112,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Alpha Beta Direct materials $ 30 $ 10 Direct labor 22 29 Variable manufacturing overhead 20 13 Traceable fixed manufacturing overhead 24 26 Variable selling expenses 20 16 Common fixed expenses 23 18 Total cost per unit $ 139 S 112 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 88,000 units of Alpha and 68,000 units of Beta. Also assume the company's raw material available for production is limited to 172,000 pounds. If Cane uses its 172,000 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 ! Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $185 and $120, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 112,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Alpha Beta Direct materials $ 30 $ 10 Direct labor 22 29 Variable manufacturing overhead 20 13 Traceable fixed manufacturing overhead 24 26 Variable selling expenses 20 16 Common fixed expenses 23 18 Total cost per unit $ 139 S 112 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 88,000 units of Alpha and 68,000 units of Beta. Also assume the company's raw material available for production is limited to 172,000 pounds. If Cane uses its 172,000 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
Expert Answer:
Answer rating: 100% (QA)
Calculating the Maximum Price for Additional Raw Materials Step 1 Determine the total pounds of raw ... View the full answer
Posted Date:
Students also viewed these accounting questions
-
sked byChina699 BEMIDJI STATE UNIVERSITY Department of Technology, Art & Design TADT 3217 : Materials Science & Metallurgy Hardness Testing [A continued look at the Heat Treatment of Steel] ...
-
A company estimates that the marginal cost (in dollar per item) of producing x items is 1.73 - 0.004x. if the cost of producing one item is $566, find the cost of producing 100 items. (Round your...
-
Compute the missing amount in each of the following separate companies a throughd. Equity, December 31, 2008 Owner investments during the year Dividends during the year Net income (loss) for the year...
-
Crawford-Austin Properties included the following stockholders' equity on its year-end balance sheet at December 31, 2006. Requirements 1. Identify the different issues of stock that Crawford-Austin...
-
Cowboy Enterprises has three service departments (administration, maintenance, and computer support) and two production departments (creative and assembly). A summary of costs and other data for each...
-
Newly formed S&J Iron Corporation has 98,000 shares of $5 par common stock authorized. On March 1, Year 1, S&J Iron Issued 10,500 shares of the stock for $10 per share. On May 2, the company issued...
-
The table below shows the demand for a new aftershave in a shop for each of the last 7 months. Month 1 2 3 4 5 6 7 Demand 23 29 33 40 41 43 49 a) Calculate a two month moving average for months two...
-
The quotation from Calvin Coolidge at the beginning of the chapter equates taxation to robbery. a. Is that a reasonable position to take? b. What alternatives to taxation could a country consider to...
-
As a systems analyst, designer, or builder, you will frequently be involved with your organization's information systems architecture. What is an information systems architecture, and what is its...
-
Investing cash flow is: a. $2. b. ($2). c. $12. d. ($12). Net income: Depreciation/amortization: Repurchase of outstanding common stock: Issuance of new debt: Sale of property: Purchase of equipment:...
-
Although system owners and system users generally have different perspectives of their organization's information system, both groups rend to focus on three business goals that are common to any...
-
Financing cash flow is: a. $8. b. ($8). c. $4. d. ($4). Net income: Depreciation/amortization: Repurchase of outstanding common stock: Issuance of new debt: Sale of property: Purchase of equipment:...
-
The key accounting considerations relating to accounts payable are: Determining their existence and ensuring that they are recorded in the appropriate accounting period. Determining their present...
Study smarter with the SolutionInn App