Faber Industries manufactures two products: Alpha and Beta. Both products

Faber Industries manufactures two products: Alpha and Beta. Both products are produced on the same assembly lines and packaged with 10 units of product per package. The predicted sales are 400 000packs of Alpha and 500 000 packs of Beta. The budgeted costs for the coming year are as follows.
Faber Industries manufactures two products: Alpha and Beta. Both products

Each product uses 50 per cent of the variable material costs. The other costs are allocated as follows: variable costs based on machine time (Alpha 200 000 hours and Beta 100 000 hours) and fixed costs allocated evenly to both products. The management of Faber Industries desires an annual profit of$200 000 per product.
Required:
a. Calculate the total cost for each product.
b. What price should be charged for each product?

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