Homework Answers
I am calculating the missing brackets
1. Increase in net income
= Additional sales * contribution ratio
Manual system = $149000*20% = $29800
Computerized system = $149000*60% = $89400
2. Margin of safety = profit / contribution ratio
Manual system = $240000/20% = $1200000
Computerized system = $240000/60% = $400000
MOS ratio = MOS sales / total sales * 100
Manual = $1200000/$1740000*100 = 0.69
Computerized = $400000/$17400000*100 = 0.23
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Computerized System Manual System $1,740,000 $1,740,000 Sales 696,000 1,392,000 Variable costs 1,044,000 Contribution margin 348,000 804,000...
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