The company is considering a purchase of equipment that

Reference no: EM13591065

The company is considering a purchase of equipment that would reduce its direct labor costs by $114,088 and would change its manufacturing overhead costs to 30% variable and 70% fixed. It is also considering switching to a pure commission for its sales staff. This would change selling expenses to 90% variable and 10% fixed (assume total selling expense is $263,280, as above). Compute (1) the contribution margin and (2) the contribution margin ratio, and recompute (3) the break-even point in sales dollars.

Contribution margin =?
Contribution margin ratio=?
Break-even point in sales=?

Reference no: EM13591065

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