School	Laboratory	Total
Sales unit	12000	4000	16000
Sales $	280 000	800 000	1 080 000
Cost of product sold	216 000	516 000	732 000
Goss profit	64 000	284 000	348 000
Operating cost	72 000	159 000	231 000
Net profit	(8000)	125 000	117 000

The indirect fixed costs of manufacture included in the cost of goods sold are $ 2 per unit for school microscopes and $ 19 per unit for laboratory microscopes. Unit variable operating costs are $ 5 for school microscopes and $ 21 for laboratory microscopes, other operating costs are fixed. Petite Views Inc. wants to eliminate school microscopes. In such a situation, the fixed manufacturing and operating costs remain unchanged. To replace school microscopes, company uses capacity to produce 2,000 additional laboratory microscopes In such a scenario, the advantage of Small Views Inc.

Increases by $ 102,000

Decrease 36,000

Increases 138,000

Increases 110,000

Increase 8,000