Brief Exercise 19-13

A Corporation is considering the purchase of a new automated shingle-cutting machine. The new machine will reduce variable labor costs but will increase depreciation expense. Contribution margin is expected to increase from $256,880to $335,920. Net income is expected to be the same at $49,400.

Degree of operating leverage before and after the purchase of the new equipment. (Round answers to 1 decimal place, e.g. 1.5.)

Degree of operating leverage (old)

Degree of operating leverage (new)