The Best Chocolate Berries Company manufactures chocolate dipped strawberries. Its volume is 3,000 boxes of strawberries per month. It is deciding whether to automate its chocolate dipping operations, which are currently completed by hand. Recently, the company received a special offer from an outside supplier regarding the automating equipment. The costs to make each box of chocolate dipped strawberries include:

Direct materials	$2.50
Labor	$2.00
Variable overhead	$1.50
Fixed overhead	$2.00

All labor is attributable to dipping operations. The cost of the machine is $250,000; it has a two-year life and there is no salvage value. Should the company replace the machine?

Yes, because the impact on total operating income per year is a $5,000 gain

No, because the impact on total operating income per year is a $5,000 loss

Yes, because the impact on total operating income per year is a $47,000 gain

No, because the impact on the unemployment rate will result in bad publicity for the company