Cane Company manufactures two products called Alpha and Beta that sell for $175 and $135, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 117,000 units of each product. Its unit costs for each product at this level of activity are given below:

	Alpha				Beta
Direct materials		$	40			$	15
Direct labor			30				30
Variable manufacturing overhead			18				16
Traceable fixed manufacturing overhead			26				29
Variable selling expenses			23				19
Common fixed expenses			26				21
Total cost per unit		$	163			$	130

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.

6.Assume that Cane normally produces and sells 101,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?

7.Assume that Cane normally produces and sells 51,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?

13.Assume that Cane