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Sunland Modernas of Juarez, Mexico, is contemplating a major change in its cost structure. Currently, all of its drafting work is performed by skilled draftsmen.

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Sunland Modernas of Juarez, Mexico, is contemplating a major change in its cost structure. Currently, all of its drafting work is performed by skilled draftsmen. Rafael Jiminez, Sunland's owner, is considerfing replacing the draftsmen with a computerized drafting system. However, before making the change, Ratad would like to know the consequences of the change, since the volume of business varies significantly from year to yex. Shown below are CVP income statements tor each alternative. (a) Determine the degree of operating leverage for each alternative. (Round answers to 2 decimal places, e.s. 1.25.) (b) Your answer is incorrect. Calculate the increase in Net income for each aiternative if saies increased by $132,000 dise to an increase in the number of units sold

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