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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 $165 and $130, respectively.

[The following information applies to the questions displayed below.]

Cane Company manufactures two products called Alpha and Beta that sell for $165 and $130, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 113,000 units of each product. Its unit costs for each product at this level of activity are given below:

Alpha Beta
Direct materials $ 40 $ 24
Direct labor 29 25
Variable manufacturing overhead 15 14
Traceable fixed manufacturing overhead 25 27
Variable selling expenses 21 17
Common fixed expenses 24 19
Total cost per unit $ 154 $ 126

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 expects to produce and sell 99,000 Betas during the current year. One of Canes sales representatives has found a new customer that is willing to buy 2,000 additional Betas for a price of $48 per unit. If Cane accepts the customers offer, how much will its profits increase or decrease?

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