played bele 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 30 25 33 30 33 $199 Beta $24 Maximum price to be paid per pound 34 23 36 26 20 $ 171 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. 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? (Round your answer to 2 decimal places.)
played bele 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 30 25 33 30 33 $199 Beta $24 Maximum price to be paid per pound 34 23 36 26 20 $ 171 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. 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? (Round your answer to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
MN.54.
![15
art 15 of 15
00:51:44
Required information
[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
Beta
Maximum price to be paid per pound
$24
30
34
25
23
33
36
30
26
33
20
$ 199 $ 171
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.
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? (Round your answer to 2 decimal places.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F876b30a4-9d92-4fe3-8414-9839fcf714ca%2F063bfa92-da48-4c27-b686-9982656405c0%2Ftj57t5u_processed.jpeg&w=3840&q=75)
Transcribed Image Text:15
art 15 of 15
00:51:44
Required information
[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
Beta
Maximum price to be paid per pound
$24
30
34
25
23
33
36
30
26
33
20
$ 199 $ 171
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.
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? (Round your answer to 2 decimal places.)
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