> - 76 111 Question 3 of 4 View Policies Current Attempt in Progress 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, 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: Computerized System Manual System $1.100.000 Sales $1.100.000 Variable costs 880,000 660,000 Contribution margin 440.000 220,000 110,000 Fixed costs 330,000 Operating income $110.000 $110.000 ter 6 - /6 E Question 3 of 4 Sales $1,100,000 $1,100,000 660,000 Variable costs Contribution margin 880,000 220,000 440,000 110,000 330,000 Fixed costs $110,000 $110,000 Operating income Determine the degree of operating leverage for each alternative. (Round answer to 2 decimal places, e.3. 15.25.) Operating leverage Manual System Computerized System eTextbook and Media Question 3 of 4 > - /6 E Computerized System eTextbook and Media Question Part Score ./2 Calculate which alternative would produce the higher operating income if sales increased by $110.000 would produce a higher operating income. eTextbook and Media Question Part Score --/1 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, t.g. 15.25%) Margin of Safety Ratio would produce a higher operating income. eTextbook and Media Question Part Score 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, es 15.25%.) Margin of Safety Ratio Manual % Computerized % could sustain the greater decline in sales before operating at a loss