Central Textiles is a clothing manufacturer that operates 16 plants throughout the southern United States and in Latin America. The Information Systems Department, which reports to the vice president of finance, operates the central mainframe and LAN at the headquarters building in Spartanburg, South Carolina, and the WAN that connects all the plants. The LANs in each plant are managed by a separate IT group at each plant that reports to the plant manager (the plant managers report to the vice president of manufacturing). The telephone communications system and long-distance agreements are managed by a telecommunications department in the headquarters that reports to the vice president of finance. The CEO of Central Textiles has come to you asking about whether this is the best arrangement, or whether it would make more sense to integrate the three functions under one new department. Outline the pros and cons of both alternatives.

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?