Northwood Company manufactures a basketball selling for $25 per unit in a small plant heavily relying 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 30,750 balls, with the following results: Sales (30,750 balls) Variable expenses Contribution margin Fixed expenses Net operating income Required: 1. Compute: $ 768,750 461,250 307,500 214,200 $ 93,300 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.