Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115,...
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Accounting
Cane Company manufactures two products called Alpha and Beta that sell for $ and $ respectively. Each product uses only one type of raw material that costs $ per pound. The company has the capacity to annually produce units of each product. Its average cost per unit for each product at this level of activity is given below:
Alpha Beta
Direct materials $ $
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
Total cost per unit $ $
The companys 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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