Requirement 2. Knight's current manufacturing process labour intensive. Kate Schoenen, Knight's production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $4,050,000. The variable costs are expected to decrease to $62 per unit. Knight expects to maintain the same sales volume and selling price next year. How would acceptance of Schoenen's proposal affect your answers to (a) and (b) in requirement 1? under (a)The contribution margin would be $ Schoenen's proposal. (b)Operating income would change to $ Requirement 3. Should Knight accept Schoenen's proposal? Explain. Operating income is expected to (5) by Although this would likely (6) acceptance of the proposal, management would consider other factors before making the final decision. It is likely that the product quality (7) using state-of-the-art equipment. The proposal increases the improve as a result of company's fixed costs. This will (8) company's operating leverage and risk. the Requirement 2. Knight's current manufacturing process labour intensive. Kate Schoenen, Knight's production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $4,050,000. The variable costs are expected to decrease to $62 per unit. Knight expects to maintain the same sales volume and selling price next year. How would acceptance of Schoenen's proposal affect your answers to (a) and (b) in requirement 1? under (a)The contribution margin would be $ Schoenen's proposal. (b)Operating income would change to $ Requirement 3. Should Knight accept Schoenen's proposal? Explain. Operating income is expected to (5) by Although this would likely (6) acceptance of the proposal, management would consider other factors before making the final decision. It is likely that the product quality (7) using state-of-the-art equipment. The proposal increases the improve as a result of company's fixed costs. This will (8) company's operating leverage and risk. the