Cane company produces two products called Alpha and Beta that sell for $108.00
and $72.00 respectively. Each product ues only one type of raw material that costs
$6 per pound.
The company has the capacity to annually produce 100,000
units of each product. Its average cost per unit for each product at this level of
activity is given below:	Alpha	Beta
Direct material	30	12
Direct labor	18	14
Variable overhead	8	6
Traceable fixed cost	10	12
Variable selling expenses	10	10
Commom fixed expenses	12	8
The company considers its traceable fixed manufacturing overhead to be avoidable,
whereas its common fixed expenses are unavoidable and have been allocated to

6. Assume that Cane normally produces and sells 90,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line?

7. Assume that Cane normally produces and sells 40,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta Product line?

8. Assume that cane normally produces and sells 60,000 Betas and 80,000 Alphas per year. If cane discontinues the beta product line, its sales representative could increase sales of Alpha by 15,000?