Chapter 6 Problems E 6-15, P 6-1A E 6-15 The following data is given in the problem. Degree of operating leverage Manual System Computerized system Assume sales increase by Recalculate net income New Sales Variable costs Contribution margin Fixed costs Recalculated Net Income Less: Net Income above Difference with S150,000 increase in sales Which system produces greater profitability? C. Margin of Safety ratio Assuming original sales given in problem Actual Sales Breakeven Sales Acutal Sales Margin of Safety Ratio Sales Variable Costs Contribution Margin Fixed Costs Net income Contribution Margin 150,000 Manual System 650,000 250,000 Manual System Manual 1.500.000 200,000 300.000 50.000 250,000 Net Income 250,000 250,000 Computerized System 650.000 250,000 Computerized System Computerized 1,500,000 600,000 900.000 650.000 250,000 Degree of Operating Leverage