**Required Information** *The following information applies to the questions displayed below:* Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity is given below: | | Alpha | Beta | |-------------------------|-------|------| | Direct materials | $42 | $24 | | Direct labor | $42 | $32 | | Variable manufacturing overhead | $26 | $24 | | Traceable fixed manufacturing overhead | $34 | $37 | | Variable selling expenses | $31 | $27 | | Common fixed expenses | $34 | $29 | | **Total cost per unit** | **$209** | **$173** | 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. **Required:** 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? | | Alpha | Beta | |-------------------------|-------|------| | Traceable fixed manufacturing overhead | $34 | $37 |
**Required Information** *The following information applies to the questions displayed below:* Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity is given below: | | Alpha | Beta | |-------------------------|-------|------| | Direct materials | $42 | $24 | | Direct labor | $42 | $32 | | Variable manufacturing overhead | $26 | $24 | | Traceable fixed manufacturing overhead | $34 | $37 | | Variable selling expenses | $31 | $27 | | Common fixed expenses | $34 | $29 | | **Total cost per unit** | **$209** | **$173** | 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. **Required:** 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? | | Alpha | Beta | |-------------------------|-------|------| | Traceable fixed manufacturing overhead | $34 | $37 |
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity is given below:
| | Alpha | Beta |
|-------------------------|-------|------|
| Direct materials | $42 | $24 |
| Direct labor | $42 | $32 |
| Variable manufacturing overhead | $26 | $24 |
| Traceable fixed manufacturing overhead | $34 | $37 |
| Variable selling expenses | $31 | $27 |
| Common fixed expenses | $34 | $29 |
| **Total cost per unit** | **$209** | **$173** |
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.
**Required:**
1. What is the total amount of traceable fixed manufacturing overhead for each of the two products?
| | Alpha | Beta |
|-------------------------|-------|------|
| Traceable fixed manufacturing overhead | $34 | $37 |
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