The total amount of traceable fixed manufacturing overhead for Alpha is $3,186,000, and for Beta, it is $3,540,000.
Traceable fixed manufacturing overhead refers to the fixed manufacturing overhead costs that can be directly attributed to and identified with a specific product. In the case of Cane Company, the traceable fixed manufacturing overhead costs for each product (Alpha and Beta) are allocated based on the production capacity.
For Alpha, the total traceable fixed manufacturing overhead is calculated by multiplying the traceable fixed overhead cost per unit ($27) by the annual production capacity (118,000 units):
Similarly, for Beta, the total traceable fixed manufacturing overhead is calculated using the traceable fixed overhead cost per unit for Beta ($30) and the annual production capacity:
Therefore, the total amount of traceable fixed manufacturing overhead for Alpha is $3,186,000, and for Beta, it is $3,540,000. These costs are specific to each product and can be directly traced to the production of Alpha and Beta, respectively.
Complete ques:
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 round. 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:
Name Alpha Beta
Direct Materials $36 $24
Direct Labor 32 27
Variable Manu Overhead 19 17
Traceable Fixed Manu Overhead 27 30
Variable Selling Expense 24 20
Common Fixed Expenses 27 22
Total Cost per Unit $165 $140
1) What is the total amount of traceable fixed manufacturing overhead for each of the two products?