For nearly 20 years, Specialized Coatings has provided painting and galvanizing services for manufacturers in Rs region. Manufacturers of various metal products have relied on the quality and quick turnaround tirne provided by Specialized Coatings and its 20 skilled employees. Durin g the last year, as a result of a sharp uphrn in the econo y, the companyi sales have n reased by 30% elab e to the previous year. The company has not been able to increase its capacity fast enough, so Specialized Costings has had to turn work away because it cannot keep up with customer requests Top management is considering the purchase of a sophisticated robotic painting booth. The booth would represent a considerable move in the direction of automation versus manual labor. I Specialized Coatings purchases the booth, it would most likely lay off 15 of its skilled painters. To analyze the decision, the company compled production information from the most recent year and then prepared a parallel compilation assuming that the company would purchase the new equipment and lay off the workers. Those data are shown below. As you can see, the company projects that during the last year it would have been far more profitable if it had used the automated approach Current Automated Approach Approach $2,000,000 $2,000,000 Sales Variable costs1.500,000 1,000,000 Contribution margin 500,000 1,000,000 380,000 800,000 Fixed costs $120,000 $200,000 Net income Interpret the contribution margin ratio under each approach Discuss the implications of break-even point in sales dollars under each approach Interpret the margin of safety ratio under each approsch Discuss the issues that the company must consider in making this decision Question Attempts: 0 of 2 used SAVE FOR LATER SUBMET