Cane Company manufactures two products called Alpha and Beta that sell for $170 and $130, respectively. Each prod uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 116,00 units of each product. Its average cost per unit for each product at this level of activity is given below:

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Chapter5: Process Costing
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Cane Company manufactures two products called Alpha and Beta that sell for $170 and $130, respectively. Each product
uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 116,000
units of each product. Its average cost per unit for each product at this level of activity is given below:
Direct materials
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
Total cost per unit
Foundational 13-13 (Algo)
X Answer is complete but not entirely correct.
Alpha
The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are
unavoidable and have been allocated to products based on sales dollars.
Units produced
2,200
Alpha
$ 30
30
20
26
22
25
$ 153
13. Assume Cane's customers would buy a maximum of 90,000 units of Alpha and 70,000 units of Beta. Also assume the raw material
available for production is limited to 221,000 pounds. How many units of each product should Cane produce to maximize its profits?
Beta
Beta
11,000
$18
25
15
28
18
20
$ 124
Transcribed Image Text:Cane Company manufactures two products called Alpha and Beta that sell for $170 and $130, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 116,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Foundational 13-13 (Algo) X Answer is complete but not entirely correct. Alpha The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Units produced 2,200 Alpha $ 30 30 20 26 22 25 $ 153 13. Assume Cane's customers would buy a maximum of 90,000 units of Alpha and 70,000 units of Beta. Also assume the raw material available for production is limited to 221,000 pounds. How many units of each product should Cane produce to maximize its profits? Beta Beta 11,000 $18 25 15 28 18 20 $ 124
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