Casas Modernas of Juarez Mexico is contemplating a

major change #6047

Casas Modernas of Juarez Mexico is contemplating a major change

Casas Modernas of Juarez, Mexico, is contemplating a major change in its cost structure.
Currently, all of its drafting work is performed by skilled draftsmen. Rafael Jiminez, Casas'
owner, is considering replacing the draftsman with a computerized drafting system. However,
before making the change, Rafael would like to know the consequences of the change, since
the volume of business varies significantly from year to year. Shown below are CVP income
statements for each alternative.

Instructions

(a) Determine the degree of operating leverage for each alternative.

(b) Which alternative would produce the higher net income if sales increased by $150,000?

(c) Using the margin of safety ratio, determine which alternative could sustain the greater
decline in sales before operating at a loss.

Casas Modernas of Juarez Mexico is contemplating a major change

ANSWER
http://paperinstant.com/downloads/casas-modernas-of-juarez-mexico-is-contemplating-a-major-
change/

1/1
Powered by TCPDF (www.tcpdf.org)