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10 July, 04:54

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 Direct materials $ 36 $ 24 Direct labor 32 27 Variable manufacturing overhead 19 17 Traceable fixed manufacturing overhead 27 30 Variable selling expenses 24 20 Common fixed expenses 27 22 Total cost per unit $ 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. Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products

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  1. 10 July, 04:59
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    Total Traceable F. MOH alpha $ 3186000 beta $ 3540000

    Explanation:

    Cane Company

    Alpha Beta

    Sale Price 180 145

    Units 118000 118000

    Direct materials $ 36 $ 24

    Direct labor 32 27

    Variable Mfg OH 19 17

    Traceable F. MOH 27 30

    Var. selling expenses 24 20

    Common F. Exp 27 22

    Total cost per unit $ 165 $ 140

    The number of units is multiplied with the unit cost of traceable fixed manufacturing overhead to get the total traceable fixed manufacturing overheads for the two products.

    Alpha Beta

    Traceable F. MOH 27 30

    Units 118000 118000

    Total Traceable F. MOH 3186000 3540000
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