Chapter 11, Problem 6F15

Cane Company manufactures two products called A1pia d Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity produce 10,0000 units of each product Its average cost per unit for each product at this level of activity are given below:

The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars.
Required:
(Answer each question independently unless instructed otherwise.)
Assume that Cane normally produces and sells 90,000 Betas per vex. What is the financial advantage (disadvantage) of discontinuing the Beta product line?