Question: Question Part Score 1/1 Your answer is partially correct Using the margin of safety ratio, determine which alternative could sustain the greater decline in sales

 Question Part Score 1/1 Your answer is partially correct Using the
margin of safety ratio, determine which alternative could sustain the greater decline

Question Part Score 1/1 Your answer is partially correct 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 Computerized 5.00 36 Manual System could sustain the greater decline in sales before operating at a loss e Textbook and Media View Policies Show Attempt History Current Attempt in Progress 3,99/6 E Imagen Arquitectnica of Tijuana, Mexico, 's contemplating a major change in its cost structure. Currently, all of its draftine work in performed by skilled draftspersons. Alfredo Ayala, Imagen'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 Computerized System Sales $1,437,500 $1.437.500 Variable costs 1.150,000 862.500 Contribution margin 287,500 575.000 Fixed costs 172.500 460,000 Operating income $115.000 $115.000 Your answer is correct. Determine the degree of operating leverage for each alternative: (Round answer to 2 decimal places, eg, 15.25)

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