Tasty Time Cafeteria operates cafeteria food services in public buildings in the Midwest. Tasty Time is contemplating a major change in its cost structure. Currently, all of their cafeteria lines are staffed with hourly wage employees who hand serve the food to customers. Benson Riggs, Tasty Time's owner, is considering replacing the employees with an automated self-service system. However, before making the change. Benson would like to know the consequences of the change, since the volume of business varies significantly from location to location. Shown below are the CVP income statements for each alternative. Personal Service System $ 2.900,000 Automated Self-Service System $ 2.900.000 1.450,000 Sales Variable costs Contribution margin 2.175,000 $ 725,000 145,000 $ 580,000 Fixed costs $ 1,450,000 870.000 $ 580,000 Net Income (a) Your answer is correct Determine the degree of operating leverage for each alternative. (Round answers to 2 decimal places, es. 15.25.) Personal Service System Automated Self-Service System Operating leverage 1.25 250 (b) Your answer is correct Which alternative would produce the higher net income if sales increased by $ 290,000 The automated self-service system would produce the higher net income. eTextbook and Media Attempts: 1 of 3 used Using multiple attempts will impact your score. 5% score reduction after attempt 2 7 (c) Using the margin of safety ratio, determine which alternative could sustain the greater decline in sales before operating at a loss (Round answers to 2 decimal places, eg, 0.25.) Personal Service System Automated Self-Service System Margin of safety ratio could sustain the greater decline in sales before operating at a loss. eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer Using multiple attempts will impact your score 5% score reduction after attempt 2