Question

Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. What is the company’s total amount of common fixed expenses?

a) $19
b) $24
c) $27
d) $0

Answer 1

The company's total amount of common fixed expenses is $24. In this case, the ratio of the sales price is $165/$130 which simplifies to 1.27.

Step-by-step explanation:

The total amount of common fixed expenses for Cane Company can be calculated by multiplying the fixed expenses by the ratio of sales between the two products.

In this case, the ratio of the sales price is $165/$130 which simplifies to 1.27.

Multiplying the fixed expenses by this ratio, we get $24, which means that the company's total amount of common fixed expenses is $24.