Azman is a sole proprietor who sells chocolate brownies in Seremban. The business has started for a few months and has been growing steadily. At present, the production and sales volume is maintained at 800 packets per month. The current income statement of the business is as follows: Sales revenue Less: Costs RM 40,000 Direct materials 14,400 Direct labour 4,000 Production overheads 5,600 Packaging 2,400 General and administrative expenses 3,000 Selling and distribution expenses 5,500 1,500 3,600 Other expenses Net profit All direct costs, production overheads and packaging costs are variable costs. The remaining costs are fixed costs. Currently, Azman is planning to expand his business in order to increase profitability while minimizing risks to the business. Two proposals have been prepared as follows: Proposal 1 The business will spend an additional RM350 per week on promotional activities at shopping malls. In addition, the business is also interested to attract more customers by showing its concern over the environment. A more environmentally friendly packaging will replace the current package which will cost RM5.00 per packet. Sales volume is expected to be increased by 30%. Proposal 2 A substitute material will be used and this will cost RM15.00 per packet. An additional delivery van will be purchased costing RM80,000. The van is expected to have 6 years useful life and a scrap value of RM5,000. The additional van will enable the business to cater for more customers and therefore is expected to increase sales volume by 25%.