321.000 Northwood Company manufactures basketballs. The company has a ball that sells for $25 At present, the ball is manufactured in a small plant that relles heavily on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost Last year, the company sold 52,000 of these balls, with the following results: Sales (52.000 balls) $ 1,300,000 Variable expenses 780,000 Contribution margin 520,000 Fixed expenses Not operating income 5.199.000 Required: 1. Compute(a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year's sales level 2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball this change takes place and the selling price per ball remains content at $25.00, what will be next year's CM ratio and the break-even 3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating Income. $199,000, as last year? 4. Refer again to the data in (2) above the president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement to), what selling price per ball must it charge next year to cover the increased labor costs? 5 Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built what would be the company's new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $199,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 52,000 balls (the same number as sold last mantha Hann fannst Diretribution forma 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income. $199,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 52,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6 Reg 6B Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year's sales level. (Round "Unit sales to break even to the nearest whole unit and other answers to 2 decimal places.) % CM Ratio Unit sales to break even Degree of operating leverage balls Rea Req2 > Rerer lo me original Oala. The company is DISCUSSing the would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, wha would be the company's new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $199,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 52,000 balls (the same number as sold las year). Prepare a contribution format income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. Reqs Reg1 Rea] Reg 3 Reg4 Req6A Req 60 Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? (Round "CM Ratio to 2 decimal places and unit sales to break even to the nearest whole unit.) CM Ratio Unit sales to break even balls Charge next year to cover the increased labor COSES! 5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company's new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $199,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 52,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. Reqs Reg 68 Reqi Reg 2 Rea Reg 4 Req6A Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $199,000, as last year? (Round your answer to the nearest whole unit.) Number of balls 5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40,00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company's new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $199,000, as last year? 6. Assume the new plant is built and that next year the company manufactures and sells 52,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6A Reg 68 Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement la), what selling price per ball must it charge next year to cover the increased labor costs? (Round your answer to 2 decimal places.) Selling price 5. Reler to the originai Bald. The company is discussing the construcuon or a new, automated manufacturing prantire new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company's new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $199,000, as last year? 6. Assume the new plant is built and that next year the company manufactures and sells 52,000 balls (the same number as sold last year). Prepare a contribution format Income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req Reg4 Rets ReqGA Reg 68 Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is bullt, what would be the company's new CM ratio and new break-even point in balls? (Round "CM Ratio* to 2 decimal places and "Unit sales to break even to the nearest whole unit.) Show less CM Ratio Unit sales to break even balls HUSL ICHIGGETICAL Y LUVLue leotu QUOI CUI 5. Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company's new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $199,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 52,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. Reg 68 Reg 1 Reg 2 Req3 Reg 4 Reqs Reg 6A If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $199,000, as last year? (Round your answer to the nearest whole unit) Number of balls rever to the original data. The company is discussing te construction or a new, automated manufacturing pianit ne new piam would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, wh would be the company's new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $199,000, as last year? 6. Assume the new plant is built and that next year the company manufactures and sells 52,000 balls (the same number as sold la year). Prepare a contribution format income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 68 Assume the new plant is built and that next year the company manufactures and sells 52,000 balls (the same number as sold last year). Prepare a contribution format Income statement and compute the degree of operating leverage. (Round "Degree of operating leverage to 2 decimal places.) Northwood Company Contribution Income Statement 0 $ 0 Degree of operating loverage