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2 The company is contemplating the purchase of a new labor saving machine that will cost 40,000 and have a 10-year useful life the company annual cost with and without the new machine are shown below: Current situation new machine Unit produced and sold 4000 4000 Direct material cost per unit 14 14 Direct labor cost per unit 8 5 Variable overhead cost per unit 2 2 Fixed cost, other 62000 62000 Increased in fixed cost, new machine 3000 By considering only the relevant costs, the net annual cost saving promised by new machine equal: 9000 12000 3000.co 6000