Cane Company manufactures two products called Alpha and Beta that sell for $195 and $150, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 123,000 units of each product. Its average cost per unit for each product at this level of activity are given below:

	Alpha	Beta
Direct materials	$ 40	$ 15
Direct labor	34	28
Variable manufacturing overhead	22	20
Traceable fixed manufacturing overhead	30	33
Variable selling expenses	27	23
Common fixed expenses	30	25
Total cost per unit	$ 183	$ 144

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

1. Assume that Cane expects to produce and sell 105,000 Betas during the current year. One of Canes sales representatives has found a new customer who is willing to buy 2,000 additional Betas for a price of $63 per unit. What is the financial advantage (disadvantage) of accepting the new customer's order?
2. Assume that Cane normally produces and sells 105,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line?
3. Assume that Cane normally produces and sells 55,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line?
4. Assume that Cane normally produces and sells 75,000 Betas and 95,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 15,000 units. What is the financial advantage (disadvantage) of discontinuing the Beta product line?
5. Assume that Cane expects to produce and sell 95,000 Alphas during the current year. A supplier has offered to manufacture and deliver 95,000 Alphas to Cane for a price of $140 per unit. What is the financial advantage (disadvantage) of buying 95,000 units from the supplier instead of making those units?