Flint Co$.$ is contemplating a major change in its cost structure. Currently, all of its drafting work is performed by skilled drafters. Mike

Flint the owner, is considering replacing the drafters with a computerized drafting system.

However, before making the change, Mike 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$)$

Determine the degree of operating leverage for each alternative.

Degree of

Operating Leverage

Manual system

Computerized system