Anna garden recently opened her own basketweaving studio. she sells finished baskets in addition to selling the raw materials needed by customers to weave baskets of their own. unfortunately, owing to space limitations, anna is unable to carry all varieties of kits originally assembled and must choose between two basic packages. the basic kit includes undyed, uncut reeds (with dye included) for weaving one basket. this basic package costs anna $16 and sells for $30. the second kit, called stage 2, includes cut reeds that have already been dyed. with this kit, the customer needs only soak the reeds and weave the basket. anna produces the stage 2 kit by using the materials included in the basic kit. because she is more efficient at cutting and dying reeds than her average customer, anna is able to produce two stage 2 kits in one hour from one basic kit. (she values her time at $18 per hour.) the stage 2 kit sells for $36. prepare an incremental analysis for anna’s basketweaving studio.

P8-4b dropping unfavorable division based on the following analysis of last year's operations of groves, inc., a financial vice president of the company believes that the firm's total net income could be increased by $160,000 if its design division were discontinued. (amounts are given in the thousands of dollars.) required provide answers for each of the following independent situations: a. assuming that total fixed costs and expenses would not be affected by discontinuing the design division, prepare an analysis showing why you agree or disagree with the vice president. b. assume that the discontinuance of the design division will enable the company to avoid 30% of the fixed portion of cost of services and 40% of the fixed operating expenses allocated to the design division. calculate the resulting effect on net income. c. assume that in addition to the cost avoidance in requirement (b), the capacity released by discontinuance of the design division can be used to provide 6,000 new services that would have a variable cost per service of $60 and would require additional fixed costs totaling $68,000. at what unit price must the new service be sold if groves is to increase its total net income by $180,000?