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Northwood Company manufactures basketballs..................: Northwood Company manufactures basketballs. The company has a ball that sells for $36. At present, the ball is manufactured in a
Northwood Company manufactures basketballs..................:
Northwood Company manufactures basketballs. The company has a ball that sells for $36. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $21.60 per ball, of which 60% is direct labor cost. Last year, the company sold 56,000 of these balls, with the following results Sales (56,000 balls) Variable expenses $2,016,000 1,209,600 Contribution margin Fixed expenses 806,400 662,400 Net operating income $ 144,000 Required 1-a. Compute last year's CM ratio and the break-even point in balls. (Do not round intermediate calculations.) CM Ratio Unit sales to break even balls 1-b. Compute the the degree of operating leverage at last year's sales level. (Round your answer to 2 decimal places.) gree of operating veraStep by Step Solution
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