Cane Company manufactures two products called Alpha and Beta that sell for $115 and $75, respectively. The company has the capacity to annually produce 100,000 units of each product. Its unit costs for each product at this level of activity (i.e., 100,000 units) are given below: Beta $ Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha 25 S 17 7 15 11 14 89S 10 12 5 17 7 10 61 $ Answer each question independently unless instructed otherwise. Hint: Before answering the questions, compute the contribution margin per unit, total traceable fixed manufacturing overhead and total common fixed expenses for each product. 1. (2.5 points) Assume that Cane expects to produce and sell 85,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 9,500 additional Alphas for a price of $75 per unit. If Cane accepts the customer's offer, how much will its profits increase or decrease? Show calculations. 2. (2.5 points) Assume that Cane expects to produce and sell 96,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 10,000 additional Alphas for a price of $75 per unit. If Cane accepts the customer's offer, it will decrease Alpha sales to regular customers by 6,000 units. Should Cane accept this special order? Show calculations. 3. (2.5 points) Assume that Cane normally produces and sells 92,000 Betas per year. The traceable fixed manufacturing overhead could be saved if either product is discontinued, but the common fixed expenses could not be saved. If Cane discontinues the Beta product line, how much will profits increase or decrease? Show calculations. 4. (2.5 points) Assume that Cane normally produces and sells 61,000 Betas and 85,000 Alphas per year. The traceable fixed manufacturing overhead could be saved if either product is discontinued, but the common fixed expenses could not be saved. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 15,000 units. If Cane discontinues the Beta product line, how much would profits increase or decrease? Show calculations. 5. (3.5 points) Assume that Cane expects to produce and sell 85,000 Alphas during the current year. A supplier has offered to manufacture and deliver 85,000 Alphas to Cane for a price of $75 per unit. Traceable fixed costs could be saved if Cane no longer produces Alphas, but common fixed costs could not be saved. Cane incurs variable selling costs regardless of its decision to make or buy Alphas. Show calculations to answer the following questions: a. If Cane buys 85,000 units from the supplier instead of making those units, what is the total dollar advantage (disadvantage) of purchasing the units rather than making them? b. What is the maximum price per unit Cane should be willing to pay the supplier? 6. (3.5 points) Assume that Cane expects to produce and sell 55,000 Alphas during the current year. A supplier has offered to manufacture and deliver 55,000 Alphas to Cane for a price of $75 per unit. Traceable fixed costs could be saved if Cane no longer produces Alphas, but common fixed costs could not be saved. Cane incurs variable selling costs regardless of its decision to make or buy Alphas. Show calculations to answer the following questions: a. If Cane buys 55,000 units from the supplier instead of making those units, what is the total dollar advantage (disadvantage) of purchasing the units rather than making them? b. What is the maximum price per unit Cane should be willing to pay the supplier