Cane Company manufactures two products called Alpha and Beta that sell for $130 and $90, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 102,000 units of each product. Its unit costs for each product at this level of activity are given below:

	Alpha				Beta
Direct materials		$	25			$	10
Direct labor			22				21
Variable manufacturing overhead			17				7
Traceable fixed manufacturing overhead			18				20
Variable selling expenses			14				10
Common fixed expenses			17				12
Total cost per unit		$	113			$	80

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.

1. Assume that Cane normally produces and sells 62,000 Betas and 82,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 17,000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease?

2. Assume that Canes customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the companys raw material available for production is limited to 162,000 pounds. How many units of each product should Cane produce to maximize its profits?

3. Assume that Canes customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the companys raw material available for production is limited to 162,000 pounds. What is the maximum contribution margin Cane Company can earn given the limited quantity of raw materials?

4. Assume that Canes customers would buy a maximum of 82,000 units of Alpha and 62,000 units of Beta. Also assume that the companys raw material available for production is limited to 162,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials? (Round your answer to 2 decimal places.)