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QUESTION

Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw...

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.

6.Assume that Cane normally produces and sells 109,000 Betas per year. If Cane discontinues the Beta product line, how much will profits increase or decrease?

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