HW 19 4/4

Homework 19 NWP Assessment Builder Ul Application NP Assen Question 4 of 4 0.33/1 View Policies Show Attempt History Current Attempt in Progress 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 varles significantly from year to year. Shown below are CVP Income statements for each alternative Manual System Computerized System Sales $1,620,000 $1,620,000 Variable costs 1.296,000 648,000 972,000 Contribution margin 324,000 Fixed costs 84,000 732,000 Net Income $240,000 $240,000 Homework 19 W NWP Assessment Builder Ul Application Question 4 of 4 0.33 Degree of Operating Leverage Manual System 135 Computerized System 4,05 e Textbook and Media Attempts: 1 of 15 (b) Calculate the increase in Net income for each alternative if sales increased by $110,000. Increase in Net Income Manual System Computerized System