format income statement for last month is given below Morton Company's contribution The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits Required: 1.Newmpment has come onto the market that would allow Morton Company to automate a portion of its operations. Variable expenses would be reduced by $7.50 per However, fixed expenses would increase to a total of $553,500 each month. Prepare unit. two contribution format income statements, one showing present operations and one showing how operations would appear if the new equipment is purchased. (Round your "Per unit" answers to 2 decimal places.) 2 Refer to the income statements in (1) above. For both present operations and the proposed new operations, compute a. The degree of operating leverage. b. The break-even point in dolar sales. c. The margin of safety in both doliar and percentage terms 3. Refer again to the data in (1) above. As a manager, what factor would enough your mind in deciding whether to purchase the new equipment? (Assume that funds are available to make the purchase.) 4. Reler to the original data. Rather than purchase new equipment, the marketing manager argues that the company's marketing strategy should be changed Rather than pay sales commissions, which are currently included in variable expenses, the would pay salespersons fixed salaries and would invest heavily in advertsing The format income statement for last month is given below Morton Company's contribution The industry in which Morton Company operates is quite sensitive to cyclical movements in the economy. Thus, profits vary considerably from year to year according to general economic conditions. The company has a large amount of unused capacity and is studying ways of improving profits Required: 1.Newmpment has come onto the market that would allow Morton Company to automate a portion of its operations. Variable expenses would be reduced by $7.50 per However, fixed expenses would increase to a total of $553,500 each month. Prepare unit. two contribution format income statements, one showing present operations and one showing how operations would appear if the new equipment is purchased. (Round your "Per unit" answers to 2 decimal places.) 2 Refer to the income statements in (1) above. For both present operations and the proposed new operations, compute a. The degree of operating leverage. b. The break-even point in dolar sales. c. The margin of safety in both doliar and percentage terms 3. Refer again to the data in (1) above. As a manager, what factor would enough your mind in deciding whether to purchase the new equipment? (Assume that funds are available to make the purchase.) 4. Reler to the original data. Rather than purchase new equipment, the marketing manager argues that the company's marketing strategy should be changed Rather than pay sales commissions, which are currently included in variable expenses, the would pay salespersons fixed salaries and would invest heavily in advertsing The