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Sam's Shingle Corporation is considering the purchase of a new automated shingle-cutting machine. The new machine will reduce variable labor costs but will increase depreciation
Sam's Shingle Corporation is considering the purchase of a new automated shingle-cutting machine. The new machine will reduce variable labor costs but will increase depreciation expense. Contribution margin is expected to increase from $303,780 to $353,580. Net income is expected to be the same at $49,800. Compute the degree of operating leverage before and after the purchase of the new equipment. (Round answers to 1 decimal place, e.g. 1.5.) Degree of operating leverage (old) Degree of operating leverage (new)
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