Cane Company manufactures two products called Alpha and Beta that sell for $190 and $155, respectively....
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Cane Company manufactures two products called Alpha and Beta that sell for $190 and $155, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 122,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha Beta $ 40 $ 24 34 28 21 19 29 32 26 22 29 24 $ 179 $ 149 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. Foundational 11-13 (Algo) 13. Assume that Cane's customers would buy a maximum of 94,000 units of Alpha and 74,000 units of Beta. Also assume that the raw material available for production is limited to 228,000 pounds. How many units of each product should Cane produce to maximize its profits? Units produced Alpha Beta 14. Assume that Cane's customers would buy a maximum of 94,000 units of Alpha and 74,000 units of Beta. Also assume that the raw material available for production is limited to 228,000 pounds. What is the total contribution margin Cane Company will earn? Total contribution margin 15. Assume that Cane's customers would buy a maximum of 94,000 units of Alpha and 74,000 units of Beta. Also assume that the company's raw material available for production is limited to 228,000 pounds. If Cane uses its 228,000 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.) Maximum price to be paid per pound Cane Company manufactures two products called Alpha and Beta that sell for $190 and $155, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 122,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha Beta $ 40 $ 24 34 28 21 19 29 32 26 22 29 24 $ 179 $ 149 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. Foundational 11-13 (Algo) 13. Assume that Cane's customers would buy a maximum of 94,000 units of Alpha and 74,000 units of Beta. Also assume that the raw material available for production is limited to 228,000 pounds. How many units of each product should Cane produce to maximize its profits? Units produced Alpha Beta 14. Assume that Cane's customers would buy a maximum of 94,000 units of Alpha and 74,000 units of Beta. Also assume that the raw material available for production is limited to 228,000 pounds. What is the total contribution margin Cane Company will earn? Total contribution margin 15. Assume that Cane's customers would buy a maximum of 94,000 units of Alpha and 74,000 units of Beta. Also assume that the company's raw material available for production is limited to 228,000 pounds. If Cane uses its 228,000 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.) Maximum price to be paid per pound
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Related Book For
Introduction to Managerial Accounting
ISBN: 978-0078025792
7th edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen
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