Casas Modernas Of Juarez Mexico Is Contemplating A Major Change In Its Cost Structure Currently All Of Its Drafting 1 (35.52 KiB) Viewed 9 times
Casas Modernas Of Juarez Mexico Is Contemplating A Major Change In Its Cost Structure Currently All Of Its Drafting 2 (21.95 KiB) Viewed 9 times
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 draftsmen 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. Sales Variable costs Contribution margin Fixed costs Net income (a) Manual System $1,800,000 1,440,000 360,000 120,000 $240,000 Computerized System $1,800,000 720,000 1,080,000 840,000 $240,000
Calculate the increase in Net income for each alternative if sales increased by $147,000. Manual System Computerized System $ Save for Later Increase in Net Income Which alternative would produce the higher net income? eTextbook and Media Attempts: 0 of 3 used Submit Answer
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