Sound Well Music Company Ltd (SMC) manufactures cassette record players. It is operating at full capacity of 10,000 units annually with a sales price of $ 3,000 per unit. The cost data are: (i) Raw materials, $ 900 per unit, (ii) Direct labour, $ 400 per unit, (iii) Variable overheads, $ 300 per unit, and (iv) Fixed cost, $60,00,000. While the SMC was planning to expand its operations, Audiocon Ltd launched a new competitive product: HiFi CD player at $3,500 per unit. To meet the competition from this new product, the SMC has under consideration two alternatives: (i) Reduce the price of the cassette player to $ 2,499 (ii) Add new features to the product by further processing and sell for $3,700. The further processing of the product would involve the following. Raw materials cost, $ 600 per unit; Labour charges, $ 300 per unit; Additional variable overheads, $ 300 per unit; and Additional fixed costs, $ 40,00,000. As a consultant, what course of action would you recommend the SMC to follow?