Burns industries currently manufactures and sells 20,000 power saws per month, although it has the capacity to produce 35,000 units per month. at the 20,000-unit-per-month level of production, the per-unit cost is $65, consisting of $40 in variable costs and $25 in fixed costs. burns sells its saws to retail stores for $80 each. allen distributors has offered to purchase 5,000 saws per month at a reduced price. burns can manufacture these additional units with no change in its present level of fixed manufacturing costs. assume that allen distributors offers to purchase the additional 5,000 saws at a price of $47 per unit. if burns accepts this price, burns' monthly gross profit on sales of power saws will

P8-4b dropping unfavorable division based on the following analysis of last year's operations of groves, inc., a financial vice president of the company believes that the firm's total net income could be increased by $160,000 if its design division were discontinued. (amounts are given in the thousands of dollars.) required provide answers for each of the following independent situations: a. assuming that total fixed costs and expenses would not be affected by discontinuing the design division, prepare an analysis showing why you agree or disagree with the vice president. b. assume that the discontinuance of the design division will enable the company to avoid 30% of the fixed portion of cost of services and 40% of the fixed operating expenses allocated to the design division. calculate the resulting effect on net income. c. assume that in addition to the cost avoidance in requirement (b), the capacity released by discontinuance of the design division can be used to provide 6,000 new services that would have a variable cost per service of $60 and would require additional fixed costs totaling $68,000. at what unit price must the new service be sold if groves is to increase its total net income by $180,000?