> Question 2 of 4 /10 E View Policies Current Attempt in Progress For nearly 20 years. Specialized Coatings has provided painting and galvanizing services for manufacturers in region Manufacturers of various metal products have relied on the quality and quickturnaround time provided by Specialud Coatings and its 20 skilled employees. During the last year, as a result of a sharp upturn in the economy, the company's sales have increased 30% relative to the previous year. The company has not been able to increase its capacity fast enough to Specialized Coatings tasud to turn work away because it cannot keep up with customer requests Top management is considering the purchase of a sophisticated robotic painting booth. The booth would representa cokderable move in the direction of automation versus manual labor. If Specialized Coatings purchases the booth it would most likely lay off 15 ar its skilled painters. To analyze the decision, the company compiled production information from the most recent year and the prepared a parallel compilation assumint that the company would purchase the new equipment and lay off the workers. Those data are shown below. As you can see the company projects that during the last year it would have been for more pathaded the automated approach Question 2 of 4 -/10 E Current Approach Automated Approach Sales $2.000.000 $2.000.000 Variable costs 1.500.000 1,000,000 Contribution margin 500.000 1.000.000 Fixed costs 380.00 800.000 Net Income $120.000 $200.000 Into the contribution martin ratio undercach approach . 1 B TT EE c - ci P Question 2 of 4 > / 10 TIL Discuss the implications of break-even point in sales dollars under each approach. 99 M ! E B WT Z 2 THE inn Interpret themsin of safety to under each porosch ULIULUI - / 10 E Interpret the margin of safety ratio under each approach 1 T I. !!! im . ME NE - blahoma y must considerin maling this decision Discuss the issues that the company must consider in making this decision E TH B . TI. Attempt of used for