Cane Company manufactures two products called Alpha and Betathat sell for $120 and $80, respectively. Each product uses onlyone type of raw material that costs $6 per pound. The company hasthe capacity to annually produce 100,000 units of each product. Itsunit costs for each product at this level of activity are givenbelow:

	Alpha				Beta
Direct materials		$	30			$	12
Direct labour			20				15
Variable manufacturing overhead			7				5
Traceable fixed manufacturing overhead			16				18
Variable selling expenses			12				8
Common fixed expenses			15				10
Cost per unit		$	100			$	68

The company considers its traceable fixed manufacturing overhead tobe avoidable, whereas its common fixed expenses are deemedunavoidable and have been allocated to products based on salesdollars.

11. How many pounds of raw material are needed to make one unitof Alpha and one unit of Beta?

12. What contribution margin per pound of raw material is earnedby Alpha and Beta? (Round your answers to 2 decimalplaces.)

13. Assume that Cane’s customers would buy amaximum of 80,000 units of Alpha and 60,000 units of Beta. Alsoassume that the company’s raw material available for production islimited to 160,000 pounds. How many units of each product shouldCane produce to maximize its profits?

14. Assume that Cane’s customers would buy a maximum of 80,000units of Alpha and 60,000 units of Beta. Also assume that thecompany’s raw material available for production is limited to160,000 pounds. What is the maximum contribution margin CaneCompany can earn given the limited quantity of raw materials?

15. Assume that Cane’s customers would buy a maximum of 80,000units of Alpha and 60,000 units of Beta. Also assume that thecompany’s raw material available for production is limited to160,000 pounds. Up to how much should it be willing to pay perpound for additional raw materials? (Round your answer to 2decimal places.)

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