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Cane Company manufactures two products called Alpha and Beta that sell for $ and $ respectively. Each product
uses only one type of raw material that costs $ per pound. The company has the capacity to annually produce
units of each product. Its average cost per unit for each product at this level of activity is given below:
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.
Assume Cane's customers would buy a maximum of units of Alpha and units of Beta. Also assume the company's
raw material available for production is limited to pounds. If Cane uses its pounds of raw materials, up to how much
should it be willing to pay per pound for additional raw materials?
Note: Round your answer to decimal places.
