Answer and Explanation:
1. The total amount of traceable fixed manufacturing overhead is given below:-
Alpha Beta
Number of units produced 100,000 100,000
Traceable fixed
manufacturing overhead $16 $18
Total amount of traceable fixed
manufacturing overhead $1,600,000 $1,800,000
2. The total amount of common fixed expenses is given below:-
Alpha Beta
Number of units produced 100,000 100,000
Common fixed
manufacturing overhead $15 $10
Total amount of common fixed
manufacturing overhead $1,500,000 $1,000,000
3. The computation of increase or decrease of profit is shown below:-
Selling price $80
Less: Variable cost
Direct material ($30)
Direct labor ($20)
Variable manufacturing
overhead ($7)
Contribution margin $23
Less: Variable selling
expenses ($12)
Profit per unit $11
Total profit increase
(10,000 × $11) $110,000
The computation of increase or decrease of profit is as shown below:-
Selling price $39
Less: Variable cost
Direct material ($12)
Direct labor ($15)
Variable manufacturing
overhead ($5)
Contribution margin $7
Less: Variable selling
expenses ($8)
Profit per unit ($1)
Total profit decrease
(5,000 × -$1) -($5,000)
