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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

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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 expense. Contribution margin is expected to increase from $249, 490 to $286, 300. Net income is expected to be the same at $40, 900. Compute the degree of operating leverage before and after the purchase of the new equipment. Degree of operating leverage (old) Degree of operating leverage (new)

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