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Martinez Manufacturing is considering buying new equipment for its factory. The new equipment will reduce variable labor costs but increase depreciation expense. Contribution margin is expected to increase from $240,000 to $288,000. Net income is expected to remain the same at $100,000. Compute the degree of operating leverage before and after the purchase of the new equipment. (Round answers to 2 decimal places, e.g. 15.25.) Degree of operating leverage Before After Martinez Manufacturing is considering buying new equipment for its factory. The new equipment will reduce variable labor costs but increase depreciation expense. Contribution margin is expected to increase from $240,000 to $288,000. Net income is expected to remain the same at $100,000. Compute the degree of operating leverage before and after the purchase of the new equipment. (Round answers to 2 decimal places, e.g. 15.25.) Degree of operating leverage Before After
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College Accounting A Practical Approach
ISBN: 978-0132564441
11th Canadian Edition
Authors: Jeffrey Slater, Brian Zwicker
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