; Required information [The following information applies to the questions displayed below. ] Cane Company manufactures two products called Alpha and Beta that sell for $150 and $105, respectively. Each product Part7 f10 uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 107,000 units of each product. Its unit costs for each product at this level of activity are given below: 10 Alpha Beta points Direct materials $ 36 $ 16 Direct labour 25 26 Variable manufacturing overhead 12 16 Traceable fixed manufacturing overhead 21 23 eBook Variable selling expenses 17 13 Common fixed expenses 20 15 References Cost per unit $125 $ 91 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. 7. Assume that Cane normally produces and sells 45,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease? -:I:|