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Morton Compony's contribufon format incorre stasement for last month is given below: The industry in which Manton Company operates is coute secsitve to cyclical movements

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Morton Compony's contribufon format incorre stasement for last month is given below: The industry in which Manton Company operates is coute secsitve to cyclical movements in the economy. Thus, profts vary considerably from yest to yeor occordeng to general economic condations. The compony has a lorge emount of unused capacity and is stuobing ways of improvinet profits. Aequired: 1. New equipment has come orte the market that would aliow Morton Company to audomate a portion of its opecations. Varlable expenses would be reduced by $6.90 per unit. Howewer, fiwed expenses would increase to a fotat of $546.480 each month. Piepare two contribution format income statement, one showing presert operateons and one showing how operations wbuld iappear if the new equpment is purchased. 2. Aefor to the income statements in (t). For the present operations and the proposed new operations, compute (a) use degree of percentago 2. Refer again to the data in (1). As a manages, what tactor would be critical in deciding whether to purchuse the new equpenent? (Assirte enough funds are owalbole to make the purchase) trategy

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