Managerial Accounting (15th Edition)

Published by McGraw-Hill Education
ISBN 10: 007802563X
ISBN 13: 978-0-07802-563-1

Chapter 12 - Differential Analysis: The Key to Decision Making - The Foundational 15 - Required - Page 560: 2

Answer

2,500,000

Work Step by Step

Total amount of common fixed expenses = Common fixed expenses * Capacity of each product per unit Total amount of common fixed expenses for the Alpha product line= 15 * 100,000 = 1,500,000 Total amount of common fixed expenses for the Beta product line= 10 * 100,000 = 1,000,000 The company’s total amount of common fixed expenses = Total amount of common fixed expenses for the Alpha product line + Total amount of common fixed expenses for the Beta product line = 1,500,000 + 1,000,000 = 2,500,000
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