U 5 A company manufactures birdcages. They are considering modifying their operations by adopting a new machine that will replace some of their direct labour costs and eliminate the need for one of their plant supervisors. The current results, and anticipated results if the changes are adopted are as follows: Current Results Proposed change Selling price per unit $25 $25 Variable Costs per unit: Manufacturing 10 8 Selling and admin 2 2 Fixed costs: Manufacturing $10,000 $14,000 Selling and admin 2,000 2,000 8 I If sales exceed the level you calculated in the previous question, which system will give higher profits? the current system 3 the proposed system both the current and proposed system will give the same profit cannot be determined A company manufactures birdcages. They are considering modifying their operations by adopting a new machine that will replace some of their direct labour costs and eliminate the need for one of their plant supervisors. The current results, and anticipated results if the changes are adopted are as follows: Current Results Proposed change Selling price per unit $25 $25 Variable Costs per unit: Manufacturing 10 8 Selling and admin 2 2 Fixed costs: Manufacturing $10,000 $14,000 Selling and admin 2,000 2,000 Which system is riskier if the volume of sales changes? the current system the proposed system both the current and proposed system have the same amount of risk cannot be determined