Cane Company manufactures two products called Alpha and Beta that sell for $210 and $172, respectively. Each produc 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: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 40 38 Contribution margin per pound 25 33 30 33 $ 199 Alpha The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expense are unavoidable and have been allocated to products based on sales dollars. Beta. $24 12. What contribution margin per pound of raw material is earned by each of the two products? Note: Round your answers to 2 decimal places. 34 23 36 26 28 $ 171 Beta
Cane Company manufactures two products called Alpha and Beta that sell for $210 and $172, respectively. Each produc 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: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 40 38 Contribution margin per pound 25 33 30 33 $ 199 Alpha The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expense are unavoidable and have been allocated to products based on sales dollars. Beta. $24 12. What contribution margin per pound of raw material is earned by each of the two products? Note: Round your answers to 2 decimal places. 34 23 36 26 28 $ 171 Beta
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dineshbhai
![[The following information applies to the questions displayed below.]
Cane Company manufactures two products 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:
Direct materials
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
Total cost per unit
Alpha
$ 40
38
25
Contribution margin per pound
Alpha
34
23
36
26
28
$ 199 $ 171
33
30
33
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.
Beta.
$24
12. What contribution margin per pound of raw material is earned by each of the two products?
Note: Round your answers to 2 decimal places.
Beta](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff4174c7b-debd-4542-b87a-b34413f7fd89%2F55321040-45f8-4e18-8bdf-6613482cf3d5%2Fbzp5ohs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
Cane Company manufactures two products 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:
Direct materials
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
Total cost per unit
Alpha
$ 40
38
25
Contribution margin per pound
Alpha
34
23
36
26
28
$ 199 $ 171
33
30
33
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.
Beta.
$24
12. What contribution margin per pound of raw material is earned by each of the two products?
Note: Round your answers to 2 decimal places.
Beta
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