Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Alpha $ 40 29 15 25 21 24 Beta $ 24 25 14 27 17 19
Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Alpha $ 40 29 15 25 21 24 Beta $ 24 25 14 27 17 19
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
[The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product
uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000
units of each product. Its average cost per unit for each product at this level of activity is given below:
Direct materials
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
Total cost per unit
Alpha
$ 40
2. What is the company's total common fixed expenses?
Total common fixed expenses
Beta
$24
29
25
15
14
25
27
21
17
24
19
$ 154 $ 126
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3cd23e71-90ba-481a-b3dc-abda2a1861eb%2Fd36e5a93-0893-44e7-89a3-46a0c88e2ee9%2Fruqboup_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product
uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000
units of each product. Its average cost per unit for each product at this level of activity is given below:
Direct materials
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
Total cost per unit
Alpha
$ 40
2. What is the company's total common fixed expenses?
Total common fixed expenses
Beta
$24
29
25
15
14
25
27
21
17
24
19
$ 154 $ 126
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.
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