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Glass company manufactures glasses that it sells to mail-order distributors.Sales price per pair of glasses: $60Manufacturing and other costs follow:Variable Cost per unitDirect Materials $13Direct labor 12Factory overhead 2Distribution 3Total Variable costs $30Fixed costs per monthFactory overhead $20,000Selling and Administrative 10,000Total Fixed costs ,000Current monthly production and sales volume 5,000 unitsMonthly capacity 6,000 unitsAdditional information: The variable distribution costs are for transportation to mail-order distributors.Required: Determine the effect of each of the following independent situations on monthly profits. Make sure you show you work and give a recommendation to management if they should accept the change.#1 A $2 increase in the unit selling price should result in a 1,200-unit decrease in monthly sales#2 A 10% decrease in the unit selling price should result in a 2,000-unit increase in monthly sales. However, because of capacity constraints, the last 1,000 units would be produced during overtime with the direct labor costs increasing by 60%.#3 a British distributor has proposed to place a special one-time order for 1,000 units at a reduced price of $55 per unit. The distributor would pay all transportation costs, so there are no variable distribution costs. There would be additional fixed selling and administrative costs of $2,000.Solution:#1#2#3