Harry, Inc. sells 13,200 units of its product per year. The selling price per unit is $112 and the variable cost per unit is $87. The company's manager is considering to lease a new machine for $240,900 per year, which allows them to make modifications to the products. To complete the modifications, the variable cost per unit will increase by $14.00, but the manager is thinking to sell the modified products for $142 per unit. Three requirements below.

1. Should Harry modify the units or sell them as is?

multiple choice

• Sell as is

• Sell with modifications

2. How much will the decision affect profit?