Blossom Corporation has collected the following information after its first year of sales. Sales were $1,860,000 on 124,000 units; selling expenses $310,000 (40% variable and 60% fixed); direct materials $633,640; direct labor $359,600; administrative expenses $334,800 (20% variable and 80% fixed); and manufacturing overhead $434,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year. X Your answer is incorrect. The company has a target net income of $248,000. What is the required sales in dollars for the company to meet its target? Sales dollars required for target net income $ 4.160.205 e Textbook and Media X Your answer is incorrect. If the company meets its target net income number, by what percentage could its sales fall before it is operating at a loss? That is, what is its margin of safety ratio? (Round answer to 2 decimal places, e.g. 10.5%.) Margin of safety ratio 32.72 % e Textbook and Media Your answer is partially correct. The company is considering a purchase of equipment that would reduce its direct labor costs by $128,960 and would change its manufacturing overhead costs to 30% variable and 70% fixed (assume total manufacturing overhead cost is $434,000, as above). It is also considering switching to a pure commission basis for its sales staff. This would change selling expenses to 90% variable and 10% fixed (assume total selling expense is $310,000, as above). Compute (1) the contribution margin and (2) the contribution margin ratio, and recompute (3) the break-even point in sales dollars. (Round contribution margin ratio to 2 decimal places, e.g. 0.55 and all other answers to 0 decimal places, e.g. 2,520. Use the current year numbers for calculations.) 1. Contribution margin $ 519560 2. Contribution margin ratio 27.93 3. Break-even point $ 2,157,680 e Textbook and Media