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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 margin
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 Before After Automation Automation $198,000 $198,000 78,000 38,000 $120,000 $160,000 15,000 58,000 $105,000 $102,000 Required: 1. Calculate Lobster Trap's break-even sales dollars before and after automation. (Round your contribution margin ratio to 4 decimal places and final answers to 2 decimal places.) Break-Even Sales Dollars Before Automation Break-Even Sales Dollars After Automation 2. Compute Lobster Trap's degree of operating leverage before and after automation. (Round your answers to 4 decimal places.) DOL Before Automation DOL After Automation eBook & Resources eBook: Calculate the degree of operating leverage and use it to predict the effect a change in sales will have on profit
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