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Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Sales revenue Less: Variable cost Contribution
Lobster Trap Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows: Sales revenue Less: Variable cost Contribution margin Less: Fixed cost Net operating income Required: Before After Automation Automation $193,000 94,000 $193,000 55,000 $138,000 17,000 $82,000 57,000 $ 81,000 $ 99,000 1. Calculate Lobster Trap's break-even sales dollars before and after automation. 2. Compute Lobster Trap's degree of operating leverage before and after automation.
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