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E6-14 Calculating Break-Even Point, Degree of Operating Leverage O LO 6-1, 6-5 Lobster Trap Company is considering automating its manufacturing facility. Company information before and

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E6-14 Calculating Break-Even Point, Degree of Operating Leverage O LO 6-1, 6-5 Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Before Automation After Automation Sales revenue $198.000 $198.000 Less: Variable costs 78,000 38.000 Contribution margin $120,000 $160.000 Less Fixed costs 15,000 58.000 Net operating income S105.000 S102000 Required: 1. Calculate Lobster Trap's break-even sales dollars before and after automation, 2. Compute Lobster Trap's degree of operating leverage before and after automation 3. Interpret the meaning of your calculations in requirement 2

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