Moscot manufactures high$-$end sunglasses that it sells in retail shops and online for $$310,$ on average. Assume the following represent manufacturing and other costs.

Variable Costs per Unit Fixed Costs per Month

Direct materials $$80$ Factory overhead $$450,000$

Direct labor $50$ Selling and administrative $375,000$

Factory overhead $35$ Total $$825,000$

Distribution $10$

Total $$175$

The variable distribution costs are for transportation to retail partners. Assume the current monthly production and sales volume is $15,000$ units. Monthly capacity is $20,000$ units.

Determine the effect of each of the following independent situations on monthly profits.

Do not use negative signs with your answers.

e$.$ Assume Moscat provides a designer case for each pair of sunglasses that it manufactures. A Chinese manufacturer has offered a one$-$year contract to supply the cases at a cost of $$10$ per unit. If Moscat accepts the offer, it will be able to reduce variable manufacturing costs by $5\%,$ reduce fixed costs by $$5,000,$ and rent out some freed$-$up space for $$4,000$ per month.