d. Assume that Cane’s customers would buy a maximum of 80,000 units of Alpha and 60,000 units of Beta. Also assume that the raw material available for production is limited to 160,000 pounds. What is the total contribution margin Cane Company will earn?e. Assume that Cane’s customers would buy a maximum of 80,000 units of Alpha and 60,000 units of Beta. Also assume that the company’s raw material available for production is limited to 160,000 pounds. If Cane uses its 160,000 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.) !Required informationThe Foundational 15 (Static) [LO13-2, LO13-3, LO13-4, LO13-5, LO13-6][The following information applies to the questions displayed below.]Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each productuses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000units of each product. Its average cost per unit for each product at this level of activity are given below:Alpha$ 30BetaDirect materials$12Direct labor2015Variable manufacturing overheadTraceable fixed manufacturing overheadVariable selling expensesCommon fixed expenses71618128.1510Total cost per unit$100$68The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expensesare unavoidable and have been allocated to products based on sales dollars.

The contribution margin is used to depict the amount of sales available to cover the fixed costs and…

Answered: d. Assume that Cane’s customers would…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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d. Assume that Cane’s customers would buy a maximum of 80,000 units of Alpha and 60,000 units of Beta. Also assume that the raw material available for production is limited to 160,000 pounds. What is the total contribution margin Cane Company will earn?

e. Assume that Cane’s customers would buy a maximum of 80,000 units of Alpha and 60,000 units of Beta. Also assume that the company’s raw material available for production is limited to 160,000 pounds. If Cane uses its 160,000 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.)

!
Required information
The Foundational 15 (Static) [LO13-2, LO13-3, LO13-4, LO13-5, LO13-6]
[The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product
uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000
units of each product. Its average cost per unit for each product at this level of activity are given below:
Alpha
$ 30
Beta
Direct materials
$12
Direct labor
20
15
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
7
16
18
12
8.
15
10
Total cost per unit
$100
$68
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.

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