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Sam's Shingle Corporation is considering the purchase of a new automated shingle-cutting machine. The new...

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Accounting

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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 $200,000 to $240,000. Net income is expected to be the same at $40,000. Compute the degree of operating leverage before and after the purchase of the new equipment. (Round answers to 2 decimal places, es. 1.52.) Degree of operating leverage (old) Degree of operating leverage (new)

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