Casas Modernas of Juarez, Mexico, is contemplating a major change in its cost structure. Currently, all of its drafting work is performed by skilled draftsmen. Rafael Jiminez, Casas owner, is considering replacing the draftsmen with a computerized drafting system. However, before making the change, Rafael would like to know the consequences of the change, since the volume of business varies significantly from year to year. Shown below are CVP income statements for each alternative.

A: Calculate the increase in Net income for each alternative if sales increased by $150,000. manual system:____________ Computerized system:_____ Which alternative would produce the higher net income ?

B: Calculate the margin of safety ratio. manual system:____________ Computerized system:_____Which alternative would produce the higher net income ?