C Last year, the company sold 30,000 of these balls, with the following results. Sales (30,000 balls) $750,000 Variable expenses 450,000 Contribution margin 300,000 Fixed expenses 210.ece Net operating income $ 90,000 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 53 per ball. If this change takes place and the selling price per ball remains constant at $25 what will be next year's CM ratio and the break even point in balls? 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, $90,000, 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 i Northwood Company wants to maintain the same CM ratio as last year las computed in requirement la), what setang price per bal must in 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%, 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 at the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $90,000 aslast . Assume the new plant is built and that next year the company manufactures and sells 30.000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage year? 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 per ball. If this change takes place and the selling price per ball remains constant at $25 what will be next year's CM ratio and the break-even point in balls? 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 $90,000, 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 1a). 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%, 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 at the new plant is bullt , how many balls will have to be sold next year to eat the same net operating income, 590,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 30,000 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. Rea 1 Reg 2 Req3 Reg 4 Reg 5 Reg.6A Red 60 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 "Degree of operating loverage to decimal places year to earn the same net operating income, $90,000, 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 1a). 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%, 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, $90,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 30,000 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. Reg 1 Reg 2 Reg 2 Reg 4 Reg 5 Req 6A 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 "Degree of operating leverage" to 2 decimal places.) CM ratio Unit sales to break even Degree of operating leverage % balls J. ICICI U UIC VIISHIGI UCLA, HLOHY ISCUSHY UIE LUISUULUVIL VI GICW, QULLU MOTIVIOLY POLLITCHCW PIONIL would slash variable expenses per ball by 40%, 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 $90,000, as last year? 6. Assume the new plant is built and that next year the company manufactures and sells 30,000 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 Reqs Req6A Reg 68 Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $5 per ball if this change takes place and the selling price per ball remains constant at $25, what will be next year's CM ratio and the break-even point in balls? CM Ratio Un sales to break even % balls U J. ITI U UTEUNIO UGIOHC Lonys UASLUSSY UTC CURSULUI VISIW, GULRICU HOHIOLLULL POR CHICW POUR would slash variable expenses per ball by 40%, 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, $90,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 30,000 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 Req Reqs Roq A Rey 60 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 eam the same net operating income, $90,000, as last year? (Round your answer to the nearest whole unit) Number of balls HCICI UNICI UGLOTHICLOMON IS UISCUSSY LIC LUISUULLUT VIGHW, GULUHIC HIGHUIOL POUL CHICW Pion would slash variable expenses per ball by 40%, 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, $90,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 30,000 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 A Reg 68 Reler 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 1a), what selling price per ball must it charge next year to cover the increased labor costs? Selling price JINCICH OUT HOI UOLD. THIC LUTIPOLY 15 ILUSHY VIC LUULUVIL VI GICW, QULHOCU TOTUOLLUT MIEL TRICIC W PIOIL would slash variable expenses per ball by 40%, 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 $90,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 30,000 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 Req 5 Req A Req6B 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%, 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? CM Ratio % Unit sales to break even balls J. ICICI LUWIE UIT VOLO. HIC LUNnly IS VISCUSSI UIC LUISUULLIVIT OIO CW, OULUHICU HINTUICILLUM IOUIL FICTIC would slash variable expenses per ball by 40%, but it would cause fixed expenses per year to double. If the new plant is bu 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, $90,000, year? b. Assume the new plant is built and that next year the company manufactures and sells 30,000 balls (the same number a 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 6A Req 6B If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $90,000, as last year? Number of balls 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 $90,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 30,000 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 Req 68 Assume the new plant is built and that next year the company manufactures and sells 30,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage Northwood Company Contribution Income Statement 0 $ 0 Degree of operating leverage