Calculate$($a$)$ contribution margin and$($b$)$ operating income.

$2.$

Bailey$\text{'}$s current manufacturing process is labor intensive. Kate Miller$,$ Bailey$\text{'}$s production$$ manager, has proposed investing in$$ state$-$of$-$the$-$art manufacturing$$ equipment, which will increase the annual fixed costs to $ $5$ comma $400$ comma $000.$ The variable costs are expected to decrease to $ $38$ per unit. Bailey expects to maintain the same sales volume and selling price next year. How would acceptance of Miller$\text{'}$s proposal affect your answers to$($a$)$ and$($b$)$ in requirement$1?$

$3.$

Should Bailey$\text{'}$s executives accept Miller$\text{'}$s $$proposal$?$ Explain.