Imagen Arquitectnica of Tijuana, Mexico, is contemplating a major change in its cost structure. Currently, all of its drafting work is performed by skilled draftspersons. Alfredo Ayala, Imagens owner, is considering replacing the draftspersons with a computerized drafting system. However, before making the change, Alfredo would like to know its consequences, since the volume of business varies significantly from year to year. Shown below are CVP income statements for each alternative:

Imagen Arquitectnica of Tijuana, Mexico, is contemplating a major change in its cost structure. Currently, all of its drafting work is performed by skilled draftspersons. Alfredo Ayala, Imagen's owner, is considering replacing the draftspersons with a computerized drafting system. However, before making the change, Alfredo would like to know its consequences, since the volume of business varies significantly from year to year. Shown below are CVP income statements for each alternative: Sales Variable costs Contribution margin Fixed costs Operating income Manual System $1,337,500 1,070,000 267,500 160,500 $107,000 Computerized System $1,337,500 802.500 535,000 428,000 $107.000 (a) Determine the degree of operating leverage for each alternative. (Round answer to 2 decimal places, e.g. 15.25.) Operating leverage Manual System Computerized System