Question

Required information Skip to question [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $205 and $164, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 127,000 units of each product. Its unit costs for each product at this level of activity are given below: Alpha Beta Direct materials $ 40 $ 24 Direct labour 37 30 Variable manufacturing overhead 24 22 Traceable fixed manufacturing overhead 32 35 Variable selling expenses 29 25 Common fixed expenses 32 27 Cost per unit $ 194 $ 163 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars.

Answer 1

Fixed costs are costs that do not change with the level of production or sales.

Step-by-step explanation:

The subject of this question is Business and it is for College level. The definition of fixed costs is that they are costs that do not change with the level of production or sales. These costs remain constant regardless of the quantity of output produced. Examples of fixed costs include rent, salaries of permanent employees, and insurance premiums. The primary topic of this question is fixed costs in business.