tes 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 89,000 units of Alpha and 69,000 units of Beta. Also assume that the company's raw material available for production is limited to 220,000 pounds. If Cane uses its 220,000 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.) Maximum price to be paid per pound
tes 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 89,000 units of Alpha and 69,000 units of Beta. Also assume that the company's raw material available for production is limited to 220,000 pounds. If Cane uses its 220,000 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.) Maximum price to be paid per pound
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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!
Required information
[The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product
uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000
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.
Alphal
$ 40
29
15
25
21
24
$ 154
Beta
$24
25
14
27
17
19
$ 126
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 89,000 units of Alpha and 69,000 units of Beta. Also assume that the
company's raw material available for production is limited to 220,000 pounds. If Cane uses its 220,000 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.)
Maximum price to be paid per pound](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F83aa628f-81e1-4bf4-9020-6e7b374f31e3%2F20130e98-d03c-499a-8e4b-8b6858d023bf%2Ffi2ma6e_processed.jpeg&w=3840&q=75)
Transcribed Image Text:tes
!
Required information
[The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product
uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000
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.
Alphal
$ 40
29
15
25
21
24
$ 154
Beta
$24
25
14
27
17
19
$ 126
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 89,000 units of Alpha and 69,000 units of Beta. Also assume that the
company's raw material available for production is limited to 220,000 pounds. If Cane uses its 220,000 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.)
Maximum price to be paid per pound
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