Check my work mode: This shows what is correct or incorrect for the work you have completed so far. It does not indicate completi 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 52,000 of these balls, with the following results: Sales (52,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,300,000 780,000 520,000 321,000 $ 199,000 Required: 1. Compute (a) last year's CM ratio and the break even point in balls, and 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. If this change takes place and the selling price per ball remains constant at $2500 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. $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 basketbolls. If Northwood Company wants to maintain the same CM ratio as last year las computed in requirement to what selling price perbas 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 of 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 fast 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 the year). Prepare a contribution format income statement and compute the degree of operating leverage Ancient hinnat entireler Prey 1 of 2 Next > for the work you have completed so far. It does not indicate com 6. Refer to the data in (5) above. a. If the new plant is buvit, 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 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req3 Req4 Reqs Reg 6 Reg 60 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? (Round "CM Ratio" to 2 decimal places and "Unit sales to break even to the nearest whole unit.) Show less 6400 CM Ratio Unit sales to break even 46,750 balls & Reg4 ReqGA > 1 of 2 Prey Next > puted in requirement 1a), what selling price per ball labor costs? hal 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 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req1 Req 2 Req3 Reg 4 Reg 5 Reg 6 Reg 68 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 59,625 Prey 1 of 2 !!! Next > next year to earn the same net operating income, $199,000, as last year? next year the company manufactures and sells 52,000 balls (the same number as sold last tribution format income statement and compute the degree of operating leverage Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req1 Reg 2 Reg 3 Reg 4 Reqs Req 6A Reg 6B 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 $ Sales 1 450 000 Variable expenses 522,000 Contribution margin 928,000 Fixed expenses 748.000 $ 180,000 Net operating income > > 5 16 Degree of operating leverage