Sigma Company manufactures a variety of special knobs for numerous customers. Annual estimated manufacturing overhead costs are S4 million, and the capacity level of machine hours 120,000. The company uses planned machine hours as the cost driver in determining the plantwide cost driver rate. Until last year, the company used approximately 100,000 machine hours per year. Last year, competition increased and demand for the company's knobs fell. In the face of continuing competition, the company estimates that it will use 80,000 machine hours in the coming year. The company sets its prices at 150% of production cost per unit. I. What is likely to happen if demand decreases further and Sigma continues to re-compute its cost driver rate using the same approach? [3 points) II. Advise the company on choosing a cost driver quantity for computing cost driver rates and explain why you advocate your choice of quantity (5 points) (12 points; 10 minutes) Mh