The following informationapplies to the questions displayed below.]

Cane Company manufactures two products called Alpha and Betathat sell for $185 and $150, respectively. Each product uses onlyone type of raw material that costs $8 per pound. The company hasthe capacity to annually produce 119,000 units of each product. Itsunit costs for each product at this level of activity are givenbelow:

	Alpha				Beta
Direct materials		$	40			$	24
Direct labor			33				28
Variablemanufacturing overhead			20				18
Traceable fixedmanufacturing overhead			28				31
Variable sellingexpenses			25				21
Common fixedexpenses			28				23
Total cost perunit		$	174			$	145

The company considers its traceable fixed manufacturing overheadto be avoidable, whereas its common fixed expenses are deemedunavoidable and have been allocated to products based on salesdollars.

5.

Assume that Cane expects to produce and sell 108,000 Alphasduring the current year. One of Cane's sales representatives hasfound a new customer that is willing to buy 23,000 additionalAlphas for a price of $132 per unit. If Cane accepts the customer’soffer, it will decrease Alpha sales to regular customers by 12,000units.

a.

Calculate the incremental net operating income if the order isaccepted? (Loss amount should be indicated with a minussign.) Inceremental net operating income? b. Based on yourcalculations above should the special order be accepted? Yes or No 6. Assume that Cane normally produces and sells 103,000 Betas peryear. If Cane discontinues the Beta product line, how much willprofits increase or decrease? profit increase or decrease by 7. Assume that Cane normally produces and sells 53,000 Betas peryear. If Cane discontinues the Beta product line, how much willprofits increase or decrease? profit increase or decrease by