Saruman Division produces memory enhancement kits for Barad Durs Uruk- Hai Microwaves. Sales of the kits have been very erratic, with some months showing a profit and some months showing a loss. Currently, the division produces as many units as are required for sales. The divisions contribution margin income statement for the most recent month is given below: Sales (13,500 units at $20 per unit) $270,000 Variable expenses (all production related) 189,000 Contribution margin 81,000 Fixed expenses (all production related) 90,000 Net operating loss $ (9,000) REQUIRED: 1. Refer to the original data. By automating, the division could slash its unit variable cost in half. However, fixed costs would increase by $118,000 per month. (i) At what volume level would the division be indifferent between automation and the current non-automated process? That is, what is the decision rule for automation in terms of volume? (ii) Based on the decision rule above, would you recommend that the division automate its operations if volume continues at the current level?