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: Product Product 1 Direct materials $ 40 $15 Direct labor 34 28 Variable manufacturing overhead 22 20 Traceable fixed manufacturing overhead 30 33 Variable selling expenses 27 23 Common fixed expenses 30 25 Total cost per unit $183 $144 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Consider each of the following questions separately.