FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Cane Company manufactures two products called Alpha and
Beta that sell for $150 and $110, respectively. Each product uses
only one type of raw material that costs $5 per pound. The
company has the capacity to annually produce 108,000 units of
each product. Its unit costs for each product at this level of
activity are given below:
Direct materials
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
Total cost per unit
Alpha
$ 30
26
13
22
Traceable fixed manufacturing overhead
Beta
$ 15
22
11
24
14
16
18
21
$130 $102
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.
Required:
1. What is the total amount of traceable fixed manufacturing
overhead for the Alpha product line and for the Beta product
line?
Alpha
Beta
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Transcribed Image Text:Cane Company manufactures two products called Alpha and Beta that sell for $150 and $110, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 108,000 units of each product. Its unit costs for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 26 13 22 Traceable fixed manufacturing overhead Beta $ 15 22 11 24 14 16 18 21 $130 $102 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. Required: 1. What is the total amount of traceable fixed manufacturing overhead for the Alpha product line and for the Beta product line? Alpha Beta
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