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Cane Company manufactures two products called Alpha and Beta that sell for $$130$ and $$90,$ respectively. Each product

uses only one type of raw material that costs $$5$ per pound. The company has the capacity to annually produce $102,000$

units of each product. Its average cost per unit for each product at this level of activity are given below:

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.

$6.$ Assume that Cane normally produces and sells $92,000$ Betas per year. What is the financial advantage $($disadvantage$)$ of discontinuing the Beta product line?

$7.$ Assume that Cane normally produces and sells $42,000$ Betas per year. What is the financial advantage $($disadvantage$)$ of discontinuing the Beta product line?

$8.$ Assume that Cane normally produces and sells $62,000$ Betas and $82,000$ Alphas per year. If Cane discontinues the Beta product line, its sales representatives could increase sales of Alpha by $17,000$ units. What is the financial advantage $($disadvantage$)$ of discontinuing the Beta product line?

$9.$ Assume that Cane expects to produce and sell $82,000$ Alphas during the current year. A supplier has offered to manufacture and deliver $82,000$ Alphas to Cane for a price of $$88$ per unit. What is the financial advantage $($disadvantage$)$ of buying $82,000$ units from the supplier instead of making those units?

$10.$ Assume that Cane expects to produce and sell $52,000$ Alphas during the current year. A supplier has offered to manufacture and deliver $52,000$ Alphas to Cane for a price of $$88$ per unit. What is the financial advantage $($disadvantage$)$ of buying $52,000$ units from the supplier instead of making those units?