Question 4 of 4

Question 4 of 4 0/2 Bridgeport Co. is contemplating a major change in its cost structure. Currently. all of its drafting work is performed by skilled drafters. Mike Bridgeport the owner. is considering replacing the drafters with a computerized drafting system. However. before making the change, Mike would like to know the consequences of the change. since the volume of business varies significantly from year to year. Shown below are CVP income statements for each alternative. Manual System Computerized System Sales Variable costs Contribution margin Fixed costs Net income s 1.290.ood 1.032000 258,000 129.000 s 129.000 S 1.290.ooo 774.000 516.000 387.000 S 129.000