The document discusses Cane Company, which manufactures products Alpha and Beta using raw materials. It asks several questions related to Cane's production and sales levels: 1) What total contribution margin will Cane earn if it produces 80,000 units of Alpha and 60,000 units of Beta, using 160,000 pounds of raw materials? 2) How many units of each product should Cane produce to maximize profits, given demands of 80,000 units of Alpha and 60,000 units of Beta, and 160,000 pounds of raw materials? 3) If Cane uses 160,000 pounds of raw materials, how much should it be willing to pay per pound for additional raw materials?

1. I really don't understand the relation between Current price + Opportunity cost and maximum
price. Maximum price to do what? Break even? Why are we adding profit and a cost together to
get a maximum price (cost). The Foundational 15 [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6]
[The following information applies to the questions displayed below.] Cane Company
manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each
product uses only one type of raw material that costs $6 per pound. The company has the
capacity to annually produce 100,000 units of each product. Its average cost per unit for each
product at this level of activity are given below: The company considers its traceable fixed
monufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable
and have been allocated to products based on sales dollars. Eoundational 11-14 4. Assume that
Cano's customers would buy a maximum of 80,000 units of Alpha and 60.000 units of Beta. Also
assume that the raw naterial avaliable for production is limited to 160,000 pounds. What total
contribution margin will it earn?
The Foundational 15 [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6] [The following information
applies to the questions displayed below] Cane Company manufactures two products called
Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw
material that costs $6 per pound. The company has the capacity to annually produce 100,000
units of each product. Its average cost per unit 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 unavoidable and have been allocated to products based
on sales dollars. Foundational 1113 13. Assume that Cane's customers would buy a maximum of
80,000 units of Alpha and 60,000 units of Beta. Also assume that the raw material available for
production is limited to 160,000 pounds. How many units of each product should Cane produce
to maximize its profits?
The Foundational 15 [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6] [The following information
applies to the questions displayed below.] Cane Company manufactures two products called
Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw
material that costs $6 per pound. The company has the capacity to annually produce 100,000
units of each product. Its average cost per unit for each product at this level of activity are given
below: The company considers its traceable fixed monufacturing overhead to be avoidable,
whereas its common fixed expenses are unavoidable and have been allocated to products based
on sales dollars. Eoundational 11-14 4. Assume that Cano's customers would buy a maximum of

2. 80,000 units of Alpha and 60.000 units of Beta. Also assume that the raw naterial avaliable for
production is limited to 160,000 pounds. What total contribution margin will it earn?
The Foundational 15 [LO11-2, LO11-3, LO11-4, LO11-5, LO11-6] [The following information
applies to the questions displayed below.] Cane Company manufactures two products called
Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw
material that costs $6 per pound. The company has the capacity to annually produce 100,000
units of each product. Its average cost per unit 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 unavoidable and have been allocated to products based
on sales dollars. oundational 1115 5. Assume that Cane's customers would buy a maximum of
80,000 units of Alpha and 60,000 tinits of Beta. Also assume that the raw haterial avaliable for
production is limited to 160,000 pounds. If Cane uses its 160,000 pounds of raw materials, up to
how much hould it be willing to pay per pound for additional raw materials? (Round your answer
to 2 decimal places.)