Assignment nment NEXT ON BACK Question 1 Bergen Hospital is contemplating an inv

Question

Assignment nment NEXT ON BACK Question 1 Bergen Hospital is contemplating an investment in an automated surgical system. Its current process relies on the a number of skilled physicians. The new equipment would employ a computer robotic system operated by a technician. The company requested an analysis of the old technology versus the new technology. The accounting department has prepared the following CVP income statements for use in your analysis. Old New $3,000,000 $3,000,000 1,650,000 727,000 Contribution margin 1,350,000 2,273,000 1,163,000 1,889,000 $187,000$384,000 Sales Variable costs Fixed costs Net income A Compute the degree of operating leverage for the company under each scenario. (Round answers to 1 decimal place, e.g. 15.7.) Degree of operating leverage Old Question Attempts: 0 of 1 used SAVE FOR LATER SUBHET ANSWER

Explanation / Answer

Degree of operating leverage : contribution margin /Net Income

Old : 1350000/187000 = 7.2

New :2273000/384000 = 5.9

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.