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pls explain Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of
pls explain
Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101.000 units of each product. Its unit costs for each product at this level of activity are given below Direct materials Direct labour Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Cost per unit Alpha $ 30 21 8 17 13 16 $105 Beta $ 12 20 6 19 9 11 $.77 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 colors 8. Assume that Cane normally produces and sells 61000 Betas and 81,000 Alphas per year. It Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by 16,000 units. If Cane discontinues the Beto product line how much would profits increase or decrease? Prot Step by Step Solution
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