Davis Kitchen Supply produces stoves for commercial kitchens. The costs to manufacture and market the stoves at the company's normal volume of 6,000 units per month are shown in the following table.. Variable materials Variable Labor 142 Unit satufacturing costs $42 67 Variable overhead 17 Book Fixed overhead 52 Total unst sanufacturing costs 5378 P Unit marketing costs Variable 17 Fixed Total unit marketing costs Total unit costs $257 Unless otherwise stated, assume that no connection exists between the situation described in each question; each is independent Unless otherwise stated, assume a regular selling price of $406 per unit. Ignore income taxes and other costs that are not mentioned in the table or in the question itself Required: of the a. Market research estimates that volume could be increased to 7,000 units, which is well within production capacity price were cut from $406 to $361 per unit. Assuming that the cost behavior patterns implied by the data in the table are correct -1. What would be the impact on monthly sales, costs, and income? 2. Would you recommend taking this action? b. On March 1, the federal govemment offers Davis a contract to supply 1,000 units to military bases for a March 31 delivery Because of an unusually large number of rush orders from its regular customers, Davis plans to produce 8,000 units during March, which will use all available capacity. If it accepts the government order, it would lose 1,000 units normally sold to regular customers to a compet The goverment contract would reimburse is "share of March manufacturing costs" plus pay a $58,000 fixed fee (pro Novable marketing costs would be incurred on the government's units) Assuming that the govemments "share of March manufacturing costs" will be the proportionate fixed manufacturing cost, what impact would accepting the government contract have on March income?