Longview Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows:
Before Automation After Automation
Sales revenue————–$194,000 ————- $194,000
‘ Variable cost————–108,000—————-40,000
Contribution margin———-$86,000 ————–$154,000
‘ Fixed cost——————15,000—————–64,000
Net income——————-$71,000—————–$90,000
1: Calculate Longview’s break-even sales dollars before and after automation. (Round your contribution margin ratio to 4 decimal places and final answers to 2 decimal places. Omit the “$” sign in your response.)
Break-even sales dollars before automation:$__________
Break-even sales dollars after automation:$__________
2: Compute Longview’s degree of operating leverage before and after automation. (Round your answers to 4 decimal places.)
DOL before automation:__________
DOL after automation:__________