Required Information[The following information applies to the questions displayed below.]Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each productuses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000units of each product. Its average cost per unit for each product at this level of activity is given below:Direct materialsDirect laborVariable manufacturing overheadTraceable fixed manufacturing overheadVariable selling expensesCommon fixed expensesTotal cost per unitAlpha$ 424226343134$ 209Maximum price to be paid per poundBeta$ 243224372729$ 173The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses areunavoidable and have been allocated to products based on sales dollars.15. Assume Cane's customers would buy a maximum of 99,000 units of Alpha and 79,000 units of Beta. Also assume the company'sraw material available for production is limited to 344.000 pounds. If Cane uses its 344,000 pounds of raw materials, up to how muchshould it be willing to pay per pound for additional raw materials?Note: Round your answer to 2 decimal places.

When there is a scarce resource for decision making purposes we do not simply use the contribution…

Answered: uses only one type of raw material that…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...

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The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
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