Broadening Your Perspective 20-2 For nearly 20 years, Specialized Coatings has provided painting and galvanizing services for manufacturers in its region. Manufacturers af various metal products have relied on the quality and quick turnaround time pravided by Specialized Coatings and its 20 skilled employees. During the last year, as a result o a sharp upturn in the economy, the company's sales have increased by 30% reative o he previous year. The company has not been able to increase its capacity as enough, so Specialized Coatings has had to turn work away because it cannat keep up with customer requests. Top management is considering the purchase of a sophisticated robotic painting boath. The haath would represent a considerable move in the direction af automation versus manual labor. If Specialized Coatings purchases the baath, it wauld mast likely lay aff 15 of its skilled painters. Ta analyze the decision, the company compiled production infarmation from the most recent year and then prepared a parallal compilation assuming that the company would purchase the new cquipment and lay off the workers. Those data are shown below. As you can see th?company projects that during the last ycar it would hav? btren far more profitable if it had used the, automated approach. Current Automated Approach Approach $1,620,000 $1,690,000 1,260,000840000 840,000 672,000 169,000 Variable costs Contribution margin Fixed costs 420,000 319,000 Net income