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Lorge Corporation has collected the following information after its first year of sales. Sales were $1,500,000 on 100,000 units; selling expenses $250,000 (40% variable and 60% fixed); direct materials $511,000; direct labor $290,000; administrative expenses $270,000 (20% variable and 80% fixed); manufacturing overhead $350,000 (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.

The company is considering a purchase of equipment that would reduce its direct labor costs by $104,000 and would change its manufacturing overhead costs to 30% variable and 70% fixed (assume total manufacturing overhead cost is $350,000, 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 $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 0 decimal places, e.g. 25% and all other answers to 0 decimal places, e.g. 2,520.)

I just need help with these last three that are marked red/incorrect, thank you!

(1) Contribution margin for current year 300,000 330,000 Contribution margin for projected year (2) Fixed costs for current year 471,000 Compute the break-even point in units and sales dollars for the first year Break-even point 157,000 units Break-even point 1 2 ,355,000 The company has a target net income of $200,000. What is the required sales in dollars for the company to meet its target? Sales dollars required for target net income 3,355,000 Margin of safety ratio - 29.80% 29.80) " 1. Contribution margin 2. Contribution margin ratio 3. Break-even point

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