Cane Company manufactures two products called Alpha and Beta that sell for $155

Question

Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its unit costs for each product at this level of activity are given below: Alpha Beta Direct materials $ 24 $ 12 Direct labor 23 26 Variable manufacturing overhead 22 12 Traceable fixed manufacturing overhead 23 25 Variable selling expenses 19 15 Common fixed expenses 22 17 Total cost per unit $ 133 $ 107

1. What is the total amount of traceable fixed manufacturing overhead for the Alpha product line and for the Beta product line?

Explanation / Answer

Traceable fixed manufacturing overhead:

A = Units × Per-unit traceable fixed manufacturing overhead

    = 110,000 × $23

    = $2,530,000 (Answer)

B = Units × Per-unit traceable fixed manufacturing overhead

    = 110,000 × $25

    = $2,750,000 (Answer)

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