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Cane Company manufactures two products called Alpha and Beta that sell for $$190$ and $$155,$ respectively. Each product

uses only one type of raw material that costs $$8$ per pound. The company has the capacity to annually produce $122,000$

units of each product. Its unit costs 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 deemed unavoidable and have been allocated to products based on sales dollars.

Assume that Cane normally produces and sells $104,000$ Betas per year. If Cane discontinues the Beta product line, how much will

profits increase or decrease?

Assume that Cane normally produces and sells $74,000$ Betas and $94,000$ Alphas per year. If Cane discontinues the Beta product

line, its sales representatives could increase sales of Alpha by $14,000$ units. If Cane discontinues the Beta product line, how much

would profits increase or decrease?

Profit

by

Assume that Cane expects to produce and sell $94,000$ Alphas during the current year. A supplier has offered to manufacture and

deliver $94,000$ Alphas to Cane for a price of $$136$ per unit. If Cane buys $94,000$ units from the supplier instead of making those units,

how much will profits increase or decrease?

Assume that Cane's customers would buy a maximum of $94,000$ units of Alpha and $74,000$ units of Beta. Also assume that the

company's raw material available for production is limited to $228,000$ pounds. How many units of each product should Cane produce

to maximize its profits?