Question 4 of 8

Question 4 of 8 View Policies / 10 Pina Colada Co. is contemplating a major change in its cost structure. Currently. all of its drafting work is performed by skilled drafters. Mike Pina Colada 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 change. since the volume of business varies significantly from year to year. Shown below are CVP income statements for each alternative. Sales Variable costs Contribution margin Fixed costs Net income Manual System $ 1.530000 1.224000 306.000 153.000 $ 153.000 Computerized System S 1,530.000 918,000 612000 459.000 s 153.000 Your answer has been saved See score details after the due date. Determine degree of operating leverage for each alternative. Manual system Computerized system Degree of Operating Leverage Attempts: 1 of 1 used