Clinton Corp. is a manufacturer of equipment used in motorcycles production. It currently produces a product with 15 parts but through redesign has reduced the number of parts to 5. Then current activity capacity and demand for the 15 part configuration and expected activity demand for the 5 part configuration are provided below:

Activities	Activity Driver	Activity Capacity	Current Activity Demand	Expected Activity Demand
Materials usage	number of parts	300,000	300,000	100,000
Assembly	direct labor hours	10,000	10,000	4,000
Purchasing parts	number of orders	10,000	8,000	6,000

Materials usage has a rate of $4 per part and no fixed costs. Assembly has a rate of $15 per labor hour with no fixed component. Purchasing requires clerks that can process 5000 purchase orders. Each clerk earns $35,000 per year. There is also a $2 per order processing cost. The product sells for $45 and 50,000 units will be produced. Required:

1. What is the total cost savings from the new design? 2. What is the new sales price if the cost savings are passed on to the customer?