Your answer is partially correct The company is considering a purchase of equipment that would reduce its direct labor costs by $110,000 and would change its manufacturing overhead costs to 30% variable and 70% fixed (assume total manufacturing overhead cost is $336,000, as above). It is also considering switching to a pure commission basis for its sales statt. This would change selling expenses to 90% variable and 10% fixed (assume total selling expense is $250,000, 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, ex, 25.25 and all other answers to decimal places, es. 2,520. Use the current year numbers for calculations.) 1. Contribution margin 43400 2 Contribution margin ratio 0.2% 3 Break-even point 104150 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 $110,000 and would change its manufacturing overhead costs to 30% variable and 70% fixed (assume total manufacturing overhead cost is $336,000, as above). It is also considering switching to a pure commission basis for its sales statt. This would change selling expenses to 90% variable and 10% fixed (assume total selling expense is $250,000, 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, ex, 25.25 and all other answers to decimal places, es. 2,520. Use the current year numbers for calculations.) 1. Contribution margin 43400 2 Contribution margin ratio 0.2% 3 Break-even point 104150 e Textbook and Media