a.

b1.

b2.

please answer A, B1, and B2 completely.

please see request 2 information

Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies 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 64,000 of these balls, with the following results Sales (64,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,600,000 960,000 640,000 427,000 $ 213,000 Refer again to the data in Required (2). 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 If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $213,000, as last year? (Round your answer to the nearest whole unit.) Number of balls w Assume the new plant is built and that next year the company manufactures and sells 64,000 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 Degree of operating leverage Reg 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6A Reg 6B 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 28.00% 61,000 balls Unit sales to break even