Carla Vista's Shingle Corporation is considering the purchase of a new automated shingle-cutting machine. The new...

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Carla Vista's Shingle Corporation is considering the purchase of a new automated shingle-cutting machine. The new machine will reduce variable labor costs but will increase depreciation expense. Contribution margin is expected to increase from $249,400 to $274,340. Net income is expected to be the same at $43,000. Compute the degree of operating leverage before and after the purchase of the new equipment. (Round answers to 2 decimal places, e.g. 1.52.) Degree of operating leverage (old) Degree of operating leverage (new) eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer Carla Vista's Shingle Corporation is considering the purchase of a new automated shingle-cutting machine. The new machine will reduce variable labor costs but will increase depreciation expense. Contribution margin is expected to increase from $249,400 to $274,340. Net income is expected to be the same at $43,000. Compute the degree of operating leverage before and after the purchase of the new equipment. (Round answers to 2 decimal places, e.g. 1.52.) Degree of operating leverage (old) Degree of operating leverage (new) eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer

Answer rating: 100% (QA)

Originally Contribution Margin 249400 Fixed Costs 206400 Net Income 43000 ... View the full answer