Question

Required information The Foundational 15 [L012-2, LO12-3, LO12-4, LO12-5, Lo12-6] [The following information applies to the questions displayed below. Cane Company manufactures two products called Alpha and Beta that sell for $180 and $145, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 118,000 units of each product. Its average cost per unit for each product at this level of activity are given below Alpha Beta 36 24 27 17 30 20 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit 32 19 27 24 27 $165 $140 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 12-1 Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? Alpha Beta Traceable fixed manufacturing overhead

Answer 1

Answer

Working		Alpha	Beta
A	Traceable Fixed manufacturing Overhead per unit	$                                                 27.00	$                             30.00
B	Level of Units for above average cost	118,000	118,000
C= A x B	Traceable Fixed manufacturing Overhead	$                                   31,86,000.00	$               35,40,000.00