The company is considering a purchase of equipment that would reduce its direct labour costs by $105,000 and would change its manufacturing overhead costs to 30% variable and 70% fixed. (Assume the total manufacturing overhead cost is $380,000, 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 the total selling expenses are $250,000, as above. Assume no change in the volume or price of the units) Calculate (1) the contribution margin and (2) the contribution margin ratio, and (3) recalculate the break-even point in sales dollars. (Round contribution margin ratio to 4 decimal places, e.g. 15.2518% and other answers to 0 decimal places, e.g. 1,525.)

What is the Contribution margin

What is the Contribution margin ratio

What is the Break-even point