Required information [The following information applies to the questions displayed below.] A company produces two products....
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Required information [The following information applies to the questions displayed below.] A company produces two products. Product 1 sells for $195 and Product 2 sells for $150. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 123,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Product Product 1 $ 40 $15 34 28 22 20 30 33 27 23 30 25 $183 $144 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoldable and have been allocated to products based on sales dollars. Consider each of the following questions separately. Required information [The following information applies to the questions displayed below.] A company produces two products. Product 1 sells for $195 and Product 2 sells for $150. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 123,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Product Product 1 $ 40 $15 34 28 22 20 30 33 27 23 30 25 $183 $144 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoldable and have been allocated to products based on sales dollars. Consider each of the following questions separately.
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