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Imagen Arquitectnica of Tijuana, Mexico, is contemplating a major change in its cost structure. Currently, all of its drafting work is performed by skilled draftspersons. Alfredo Ayala, Imager's owner, is considering replacing the draftspersons with a computerized drafting system However, before making the change, Alfredo would like to know its consequences, since the volume of business varies significantly from year to year. Shown below are CVP income statements for each alternative: Manual System $2.240,000 Computerized System $2.240,000 Sales Variable costs 1.792,000 1.344.000 Contribution margin 448,000 896,000 Fixed costs 336,000 784,000 Operating income $112.000 $112.000 Your answer is incorrect. Determine the degree of operating leverage for each alternative. (Round answer to 2 decimal places, eg. 15.25.) Operating leverage Manual System 2.50 Computerized System 5.00 e Textbook and Media Assistance Used Question Part Score 0/2 Calculate which alternative would produce the higher operating income if sales increased by $112,000. D Computerized System would produce a higher operating income. e Textbook and Media Using the margin of safety ratio, determine which alternative could sustain the greater decline in sales before operating at a loss. (Round margin of safety ratio to 2 decimal places, e.g. 15.25%) Margin of Safety Ratio Manual 2.50 96 5.00 R % Computerized Manual System could sustain the greater decline in sales before operating at a loss