Exercise 20-15 Arquitectos Interiores of Juarez, Mexico, is contemplating a major change in its coat structure. Currently, all of its drafting work is performed by skilled draftsmen. Afonso Jiminez, Arquitectos' owner, is considering replocing the draftsmen with a computerized drefting system However, before making the change, Alfonso 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 stetements for each alternative Sales Variable costs Contribution margin Fixed costs Net income $1,716,000 1,372,800 343,200 14,400 $228,800 $1,716,000 696,400 1,029,60O 800,800 $228,800 (a) Detemine the degree of operating leverage for each alternatie. (Round answers to 2 decimal place, e.g. 1.25.) Manual System Computerized System (b) Calculate the increase in Net income for each altemative if sales increased by $124,000 Manual System Computenized System Which alternative would produce the higher net income? (c) Calculate the margin of safety ratio. (Round ratios to 2 decial place, e.g. 0.25.) Manual System Computorized Systam Using the margin of safety retio, determine which alternative could sustain the greater dedine in sales before operating at e loss