The following information applies to the questions displayed below.] Cane Compan
ID: 2426645 • Letter: T
Question
The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 units of each product. Its unit costs for each product at this level of activity are given below:
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.
How many pounds of raw material are needed to make one unit of Alpha and one unit of Beta?
Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 units of each product. Its unit costs for each product at this level of activity are given below:
Explanation / Answer
raw materil for alpha = $40/$8 = 5 pound per unit
Raw material for beta = $24/$8 = 3 pounds per unit
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