Cane Company manufactures two products called Alpha and Beta that sell for $140 and $100, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 106,000 units of each product. Its unit costs for each product at this level of activity are given below:

	Alpha				Beta
Direct materials		$	32			$	16
Direct labor			24				19
Variable manufacturing overhead			10				9
Traceable fixed manufacturing overhead			20				22
Variable selling expenses			16				12
Common fixed expenses			19				14
Total cost per unit		$	121			$	92

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.

A. Assume that Cane normally produces and sells 94,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?

B. Assume that Cane normally produces and sells 44,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?

C. Assume that Canes customers would buy a maximum of 84,000 units of Alpha and 64,000 units of Beta. Also assume that the companys raw material available for production is limited to 166,000 pounds. Up to how much should it be willing to pay per pound for additional raw materials?

D. Assume that Canes customers would buy a maximum of 84,000 units of Alpha and 64,000 units of Beta. Also assume that the companys raw material available for production is limited to 166,000 pounds. How many units of each product should Cane produce to maximize its profits?