### Required Information **[The following information applies to the questions displayed below.]** Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity is given below: | **Cost Components** | **Alpha** | **Beta** | |--------------------------------------------------|-----------|----------| | Direct materials | $42 | $34 | | Direct labor | $42 | $32 | | Variable manufacturing overhead | $26 | $34 | | Traceable fixed manufacturing overhead | $34 | $37 | | Variable selling expenses | $31 | $27 | | Common fixed expenses | $34 | $29 | | **Total cost per unit** | **$209** | **$173** | 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. --- **Problem Statement** 15. Assume that Cane's customers would buy a maximum of 99,000 units of Alpha and 79,000 units of Beta. Also assume that the raw material available for production is limited to 344,000 pounds. If Cane uses its 344,000 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.)** **Graph Explanation:** There is no graph or diagram displayed in this material.
### Required Information **[The following information applies to the questions displayed below.]** Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity is given below: | **Cost Components** | **Alpha** | **Beta** | |--------------------------------------------------|-----------|----------| | Direct materials | $42 | $34 | | Direct labor | $42 | $32 | | Variable manufacturing overhead | $26 | $34 | | Traceable fixed manufacturing overhead | $34 | $37 | | Variable selling expenses | $31 | $27 | | Common fixed expenses | $34 | $29 | | **Total cost per unit** | **$209** | **$173** | 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. --- **Problem Statement** 15. Assume that Cane's customers would buy a maximum of 99,000 units of Alpha and 79,000 units of Beta. Also assume that the raw material available for production is limited to 344,000 pounds. If Cane uses its 344,000 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.)** **Graph Explanation:** There is no graph or diagram displayed in this material.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![### Required Information
**[The following information applies to the questions displayed below.]**
Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity is given below:
| **Cost Components** | **Alpha** | **Beta** |
|--------------------------------------------------|-----------|----------|
| Direct materials | $42 | $34 |
| Direct labor | $42 | $32 |
| Variable manufacturing overhead | $26 | $34 |
| Traceable fixed manufacturing overhead | $34 | $37 |
| Variable selling expenses | $31 | $27 |
| Common fixed expenses | $34 | $29 |
| **Total cost per unit** | **$209** | **$173** |
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.
---
**Problem Statement**
15. Assume that Cane's customers would buy a maximum of 99,000 units of Alpha and 79,000 units of Beta. Also assume that the raw material available for production is limited to 344,000 pounds. If Cane uses its 344,000 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.)**
**Graph Explanation:**
There is no graph or diagram displayed in this material.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Febfcfc0b-9f32-4e16-9143-aece98b8dc65%2Fd2c09114-91a8-47c6-88a0-218bc945ac2b%2F4ccj2w.jpeg&w=3840&q=75)
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 $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity is given below:
| **Cost Components** | **Alpha** | **Beta** |
|--------------------------------------------------|-----------|----------|
| Direct materials | $42 | $34 |
| Direct labor | $42 | $32 |
| Variable manufacturing overhead | $26 | $34 |
| Traceable fixed manufacturing overhead | $34 | $37 |
| Variable selling expenses | $31 | $27 |
| Common fixed expenses | $34 | $29 |
| **Total cost per unit** | **$209** | **$173** |
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.
---
**Problem Statement**
15. Assume that Cane's customers would buy a maximum of 99,000 units of Alpha and 79,000 units of Beta. Also assume that the raw material available for production is limited to 344,000 pounds. If Cane uses its 344,000 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.)**
**Graph Explanation:**
There is no graph or diagram displayed in this material.
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