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The following information applies to the questions displayed below. Cane Company manufactures two products called Alpha and Beta that sell for $190 and $155, respectively.

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The following information applies to the questions displayed below. 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 Alpha Beta $40 24 28 19 29 32 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 34 21 26 29 24 Total cost per unit $179 $149 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. value: 0.83 points 5. Assume that Cane expects to produce and sell 109,000 Alphas during the current year. One of Cane's sales representatives has found a new customer that is willing to buy 24,000 additional Alphas for a price of $136 per unit. If Cane accepts the customer's offer, it will decrease Alpha sales to regular customers by 11,000 units. a. Calculate the incremental net operating income if the order is accepted? (Loss amount should be indicated with a minus sign.) 8. 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 ncreases

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