Cane Company manufactures two products called Alpha and Beta that sell for $150 and $105, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 107,000 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 experhes Common fixed expenses Total cost per unit Alpha $ 30 25 12 10 21 23 17 13 20 15 $ 125 $ 91 Beta $ 10 20 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. Total contribution margin 14. Assume that Cane's customers would buy a maximum of 85,000 units of Alpha and 65,000 units of Beta. Also assume that t material available for production is limited to 166,000 pounds. What is the total contribution margin Cane Company will earn?

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Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.