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CHAPTER END REVIEW Best Sleep Company manufactures two mattress toppers called Alpha and Beta that sell for $210 and$172, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 128,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha $ 40 Beta $ 24 Direct materials 34 38 Direct labor 23 25 Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 36 33 26 30 33 28 $ 171 $199 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 doll ars. 12.WHAT CONTRIBUTION MARGIN PER POUND OF RAW MATERIAL IS EARNED BY EACH OF THE TWO PRODUCTS? 13. ASSUME THAT CANE'S CUSTOMERS WOULD BUY A MAXIMUM OF 98,000 UNITS OF ALPHA AND 78,000 UNITS OF BETA. ALSO ASSUME THAT THE COMPANY'S RAW MATERIAL AVAILABLE FOR PRODUCTION IS LIMITED TO 248,000 POUNDS, HOW MANY UNITS OF EACH PRODUCT SHOULD CANE PRODUCE TO MAXIMIZE ITS PROFITS? 14. ASSUME THAT CANE'S CUSTOMERS WOULD BUY A MAXIMUM OF 98,000 UNITS OF ALPHA AND 78,000 UNITS OF BETA. ALSO ASSUME THAT THE COMPANY'S RAW MATERIAL AVAILABLE FOR PRODUCTION IS LIMITED TO 248,000 POUNDS. WHAT IS THE MAXIMUM CONTRIBUTION MARGIN CANE COMPANY CAN EARN GIVEN THE LIMITED QUANTITY OF RAW MATERIALS? 15. ASSUME THAT CANE'S CUSTOMERS WOULD BUY A MAXIMUM OF 98,000 UNITS OF ALPHA AND 78,000 UNITS OF BETA. ALSO ASSUME THAT THE COMPANY'S RAW MATERIAL AVAILABLE FOR PRODUCTION IS LIMITED TO 248,000 POUNDS. IF CANE USES ITS 248,000 POUNDS OF RAW MATERIALS, UP TO HOW MUCH SHOULD IT BE WILLING TO PAY PER POUND FOR ADDITIONAL RAW MATERIALS