Superior Views is a manufacturer of binoculars. Its high-end product is available online and is also sold at select retail outlets. The binoculars sell for an average price of $310. Superior currently produces and sells 15,000 sets of binolucars each month. Manufacturing capacity is 20,000 sets per month. Fixed costs per month Factory overhead Variable costs per set $450,000 Direct materials $80 Selling and administrative expenses Total 375,000 Direct labor 50 $825,000 Factory overhead 35 Distribution 10 $175 The distribution costs are to transport product to retail outlets. Superior currently produces and sells 15,000 sets of binolucars each month. Manufacturing capacity is 20,000 sets per month. Variable costs per set Fixed costs per month Factory overhead $450,000 Direct materials Selling and administrative expenses Total 375,000 Direct labor $825,000 Factory overhead Distribution $80 50 35 10 $175 1 The distribution costs are to transport product to retail outlets. If Suuperior were to eliminate the option for lenses with a longer distance range, its variable costs could be reduced by $5 and factory overhead could be reduced by $50,000. However, the selling price would probably have to be reduced to an average of $290 per set.