Requirement 2. Brooke's current manufacturing process is labor intensive. Kate Wolf, Brooke's production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $4,980,000. The variable costs are expected to decrease to $36 per unit. Brooke expects to maintain the same sales volume and selling price next year. How would acceptance of Wolf's proposal affect your answers to (a) and (b) in requirement 1? Recalculate (a) and (b) if the proposal is accepted. (a) The contribution margin would be (b) Operating income would change to under Wolf's proposal. Requirement 3. Should Brooke accept Wolf's proposal? Explain. Operating income is expected to income alone, Brooke should by the proposal Based on the operating Manangement would consider other factors before making the final decision. It is likely that product quality proposal improve as a result of using state-of-the-art equipment. However, the the company's fixed cost. This will the company's operating leverage and risk.