Cane Company manufactures two products called Alpha and Beta that sell for $135
ID: 2480609 • Letter: C
Question
Cane Company manufactures two products called Alpha and Beta that sell for $135 and $95, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 105,000 units of each product. Its unit costs for each product at this level of activity are given below:
What contribution margin per pound of raw material is earned by Alpha and Beta? (Round your answers to 2 decimal places.)
Assume that Cane’s customers would buy a maximum of 83,000 units of Alpha and 63,000 units of Beta. Also assume that the company’s raw material available for production is limited to 200,000 pounds. How many units of each product should Cane produce to maximize its profits?
Assume that Cane’s customers would buy a maximum of 83,000 units of Alpha and 63,000 units of Beta. Also assume that the company’s raw material available for production is limited to 200,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?
Assume that Cane’s customers would buy a maximum of 83,000 units of Alpha and 63,000 units of Beta. Also assume that the company’s raw material available for production is limited to 200,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)
Alpha Beta Direct materials $ 30 $ 18 Direct labor 23 16 Variable manufacturing overhead 10 8 Traceable fixed manufacturing overhead 19 21 Variable selling expenses 15 11 Common fixed expenses 18 13 Total cost per unit $ 115 $ 87
What contribution margin per pound of raw material is earned by Alpha and Beta? (Round your answers to 2 decimal places.)
Assume that Cane’s customers would buy a maximum of 83,000 units of Alpha and 63,000 units of Beta. Also assume that the company’s raw material available for production is limited to 200,000 pounds. How many units of each product should Cane produce to maximize its profits?
Assume that Cane’s customers would buy a maximum of 83,000 units of Alpha and 63,000 units of Beta. Also assume that the company’s raw material available for production is limited to 200,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?
Assume that Cane’s customers would buy a maximum of 83,000 units of Alpha and 63,000 units of Beta. Also assume that the company’s raw material available for production is limited to 200,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)
Explanation / Answer
Alpha Beta sales price p.u $135 $95 Less: Direct materials 30 18 Direct labor 23 16 Variable manufacturing overhead 10 8 Variable selling expenses 15 11 Contribution p..u $57 $42 R. M per unit [$30/$6 per pound][$18/6] 5.00 3.00 Contribution pr pound of RM 11.40 14 Ranking II I Cane’s customers would buy a maximum of 83,000 units of Alpha and 63,000 units of Beta. Also assume that the company’s raw material available for production is limited to 200,000 pounds. NO OF UNITS TO BE PRODUCED TO MAXIMIZE PROFIT RAW MATERIAL P.U MAXIMUM DEMAND RM REQUIRED AVAILABLE R.M UNITS PRODUCED BETA 3 63000 189000 POUNDS 189000 POUND 63000 ALPHA 5 83000 415000 POUNDS 11000 POUND(B. FIG) 2200 604000 200000 POUND CALCULATION OF CONTRIBUTION ON 63000 UNITS OF BETA % 2200 ALPHA PRODUCED UNITS PRODUCED CONTRIBUTION / UNIT TOTAL CONTRIBUTION BETA 63000 $42 $2,646,000 ALPHA 2200 $57 $125,400 $2,771,400
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