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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 $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 average cost per unit for each product at this level of activity is given below:
Alpha Beta
Direct materials $ 24 $ 12
Direct labor 2326
Variable manufacturing overhead 2212
Traceable fixed manufacturing overhead 2325
Variable selling expenses 1915
Common fixed expenses 2217
Total cost per unit $ 133 $ 107
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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