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 labour workers. Thus, variable expenses are high, totaling $15 per ball, of which 60% is direct labour cost. Last year, the company sold 30,000 of these balls, with the following results: Sales (30,000 balls) Variable expenses Contribution margin Fixed expenses $ 750,000 450,000 300,000 210,000 Net operating income $ 90,000 Required: 1-a. Compute last year's CM ratio and the break-even point in balls. CM Ratio Unit sales to break even 40 % 21,000 balls 1-b. Compute the the degree of operating leverage at last year's sales level. (Round your answer to 2 decimal places.) Degree of operating leverage 3.33