Sams Shingle Corporation is considering the purchase of a new automated shingle-cutting machine. The new...
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Accounting
Sams 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 $272,460 to $315,480. Net income is expected to be the same at $47,800. 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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