Northwood Company manufactures basketballs. The company has a ball that sells for $42 At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling S25.20 per ball, of which 60% is direct labor cost. Last year, the company sold 60,000 of these balls, with the following results: Sales (60,000 balls) Variable expenses $2,520,000 1,512,000 1,008,000 Contribution margin Fixed expenses 840,000 Net operating income S 168,000 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.) egree of operating Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.36 per ball. If this change takes place and the selling price per ball remains constant at S42 00, what will be next year's CM ratio and the break-even point in balls? (Do not round 2. intermediate calculations.) CM Ratio Unit sales to break even balls