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A Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material

A Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its unit costs for each product at this level of activity are given below:

Alpha Beta
Direct materials $ 42 $ 24
Direct labor 42 32
Variable manufacturing overhead 26 24
Traceable fixed manufacturing overhead 34 37
Variable selling expenses 31 27
Common fixed expenses 34 29
Total cost per unit $ 209 $ 173

The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are deemed unavoidable and have been allocated to products based on sales dollars.

Required:

Assume that Cane normally produces and sells 79,000 Betas and 99,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 12,000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease?(Input the amount as positive value.)

Profit Increases or decreases by: $____

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