Cane Company manufactures two products called Alpha and Beta that sell for $ and $ respectively. Each product uses only one type of raw material that costs $ per pound. The company has the capacity to annually

produce  units of each product. Its average cost per unit for each product at this level of activity are given below: 

 

Alpha Beta

Direct materials $ $

Direct labor

Variable manufacturing overhead

Traceable fixed manufacturing overhead

Variable selling expenses

Common fixed expenses

Total cost per unit $ $

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.

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

Answer rating: 100% (QA)

Answer To solve this problem we need to determine the maximum profit that Cane Company can achieve b... View the full answer