Lorge Corporation has collected the following information after its first year of sales. Sales were $1.575,000 on 105,000 units: selling expenses $250,000 (40% variable and 60% fixed); direct materials $606,100; direct labor $250,000; administrative expenses $270,000 (20% variable and 80% fixed); and manufacturing overhead $357.000 (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. 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 1 decimal place, e.g. 10.5%.) % Margin of safety ratio (e) The company is considering a purchase of equipment that would reduce its direct labor costs by $104,00 and would change its manufacturing overhead costs to 30% variable and 70% fixed (assume total manufacturing overhead cost is $350,000, as above). Compute (1) the contribution margin and (2) the contribution margin ration, and recomputed (3) the break-even point in sales dollars. Comment on the effect each of management's proposed changes has on the break-even point