3) Marina Manufacturing is considering buying new equipment for its factory. The new equipment will reduce variable labor costs but increase depreciation expense. Contribution margin is expected to increase from $250,000 to $300,000. Net income is expected to remain the same at $100,000 Instructions (a) Compute the degree of operating leverage before and after the purchase of the new equipment (b) Interpret your results. Discuss the change in earnings volatility and the why the changes caused this change. Contribution margin + Net Income Degree of operating leverage (a) Before: After (b)