I only need help with #6.

1. CM RATIO = 40%

UNITL SALES TO BREAK EVEN= 31,900 BALLS

DEGREE OF OPERATING LEVERAGE= 2.98

2. CM Ratio= 28%

Unit sales to breakeven= 45,571 balls

3. 68,571

4. 30

5. CM ration= 64%

unit sales to break even= 39,875 balls

6A??????

6B????

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 48,000 of these balls, with the following results: Sales (48,eee balls) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,200,000 72e,eee 480,cee 319,00 161,000 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. 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? 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. $161.000.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 12). 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 burit, how many balls will have to be sold next year to earn the same net operating Income. $161.000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 48.000 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 belows. Reg 1 Reg 2 Req3 Req4 Reg 5 Req 6A Reg 63 Assume the new plant is built and that next year the company manufactures and sells 48,000 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 Variable expenses Contribution margin Cost of goods sold Net operating income 1.200.000 518.400 881.800 838.000 $ 43.800 Degree of operating leverage 15.633