Refer to the data in exercise 5-20. New operations have been discovered that will reduce the cost of sewing and cutting by 10 percent. This operation requires a new type of cloth that will increase materials costs by 6 percent. No other costs would be affected. Customers would not detect a difference in the quality of cloth. In any case, the company does not plan to increase the market price of its sweatshirts. Management wants your advice about purchasing this new type of cloth.

Should Sweatshirts, Inc., use the new operations that require the new type of cloth?