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Cane Company manufactures two products called Alpha and Beta that sell for $215 and $160,...

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Accounting

Cane Company manufactures two products called Alpha and Beta that sell for $215 and $160, respectively. Each product uses only one type of raw material that costs $7 per pound. The company has the capacity to annually produce 125,000 units of each product. Its average cost per unit for each product at this level of activity is given below in the photo: The companys traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars.
6. Assume Cane normally produces and sells 106,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product line?
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