Richardson Radio Company manufactures small radios. Last year the company sold 25,000 units with the following results. Sales..... Costs: Fixed...... $ 150,000 Variable....... $375,000 525,000 ..$625,000 100,000 Operating Income In an attempt to improve its product, the company is considering replacing a component part that has a cost of $ 2.50 with a new and better part costing $ 4.50 per unit in the coming year. A new machine would also be needed to increase plant capacity. The machine would increase fixed costs by $ 3,000 annually.