Required information The Foundational 15 [LO12-2, L012-3, LO12-4, LO12-5, LO12-6
ID: 2523573 • Letter: R
Question
Required information The Foundational 15 [LO12-2, L012-3, LO12-4, LO12-5, LO12-6] The following information applies to the questions displayed below.] 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 are given below: Alpha Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Beta $ 18 25 15 28 18 20 $124 $ 30 30 20 26 25 $153 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars.Explanation / Answer
Answers
Alpha
Beta
Direct Material per unit ($)
$ 30.00
$ 18.00
Raw material rate per pound ($)
$ 6.00
$ 6.00
Pounds of raw material per unit [Answer 11]
5
3
Alpha
Beta
Sales price
$ 170.00
$ 130.00
Variable cost per unit:
Direct material
$ 30.00
$ 18.00
Direct labor
$ 30.00
$ 25.00
manufacturing overhead
$ 20.00
$ 15.00
Selling expense
$ 22.00
$ 18.00
Total variable cost
$ 102.00
$ 76.00
Contribution margin per unit
$ 68.00
$ 54.00
Pounds of arw material per unit [Answer 11]
5
3
Contribution margin per POUND [Answer 12]
$ 13.60
$ 18.00
Alpha
Beta
Units (max)
90000
70000
raw material req per unit
5
3
Total raw material requirement
450000
210000
Limited raw material allocated to
221000
0
Units produced [ Answer 13]
44200
0
Alpha
Units produced [ Answer 13]
44200
Contribution margin per unit
$ 68.00
Total contribution margin [Answer 14]
$ 30,05,600.00
Alpha
Beta
Direct Material per unit ($)
$ 30.00
$ 18.00
Raw material rate per pound ($)
$ 6.00
$ 6.00
Pounds of raw material per unit [Answer 11]
5
3
Alpha
Beta
Sales price
$ 170.00
$ 130.00
Variable cost per unit:
Direct material
$ 30.00
$ 18.00
Direct labor
$ 30.00
$ 25.00
manufacturing overhead
$ 20.00
$ 15.00
Selling expense
$ 22.00
$ 18.00
Total variable cost
$ 102.00
$ 76.00
Contribution margin per unit
$ 68.00
$ 54.00
Pounds of arw material per unit [Answer 11]
5
3
Contribution margin per POUND [Answer 12]
$ 13.60
$ 18.00
Alpha
Beta
Units (max)
90000
70000
raw material req per unit
5
3
Total raw material requirement
450000
210000
Limited raw material allocated to
221000
0
Units produced [ Answer 13]
44200
0
Alpha
Units produced [ Answer 13]
44200
Contribution margin per unit
$ 68.00
Total contribution margin [Answer 14]
$ 30,05,600.00
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