Question
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Before Automation After Automation Sales revenue $
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows:
| Before Automation | After Automation | |||||
| Sales revenue | $ | 192,000 | $ | 192,000 | ||
| Less: Variable cost | 103,000 | 46,000 | ||||
| Contribution margin | $ | 89,000 | $ | 146,000 | ||
| Less: Fixed cost | 12,000 | 62,000 | ||||
| Net operating income | $ | 77,000 | $ | 84,000 | ||
Required: 1. Calculate Lobster Traps break-even sales dollars before and after automation. (Round your contribution margin ratio to 4 decimal places and final answers to 2 decimal places.) 2. Compute Lobster Traps degree of operating leverage before and after automation. (Round your answers to 4 decimal places.)
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Oil And Gas Industry IRS Audit Technique Guide
Authors: Internal Revenue Service
1st Edition
1304113434, 978-1304113436
