Assume that canes customers would buy a maximum of 81000

Reference no: EM13576295

Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101,000 units of each product. Its unit costs for each product at this level of activity are given below:

	Alpha			Beta
Direct materials		$	30		$	12
Direct labor			21			20
Variable manufacturing overhead			8			6
Traceable fixed manufacturing overhead			17			19
Variable selling expenses			13			9
Common fixed expenses			16			11

Total cost per unit		$	105		$	77

The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars.

Required:

Assume that Cane's customers would buy a maximum of 81,000 units of Alpha and 61,000 units of Beta. Also assume that the company's raw material available for production is limited to 161,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)

please show me the procedure, thx

Reference no: EM13576295

Questions Cloud

A review of the balance sheet of a retailer such as : a review of the balance sheet of a retailer such as wal-mart will disclose that in current assets the majority

Use the following accounts and information to prepare in : use the following accounts and information to prepare in good form an income statement statement of retained earnings

Tanner-unf corporation acquired as a long-term investment : tanner-unf corporation acquired as a long-term investment 240 million of 6 bonds dated july 1 on july 1 2013. company

Calculate uop or watson k factors for n-pentane cyclohexane : calculate uop or watson k factors for n-pentane cyclohexane methylcyclohexane benzene and xylene to consider the

Assume that canes customers would buy a maximum of 81000 : cane company manufactures two products called alpha and beta that sell for 125 and 85 respectively. each product uses

Fortnightly payrolls in august were for the fortnight ended : abc pays all its employees on a fortnightly basis.the following information is for its july and august -july

Yukon bike corp manufactures mountain bikes and distributes : yukon bike corp. manufactures mountain bikes and distributes them through retail outlets in canada montana idaho oregon

Farm labs inc provides mad cow disease testing for both : farm labs inc. provides mad cow disease testing for both state and federal governmental agricultural agencies. because

The purpose of part iii is to obtain an understanding of : the purpose of part iii is to obtain an understanding of internal control and assess control risk for pinnacle

User Account

All Pages