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 labor workers. Thus, variable expenses are high, totaling $15.00 per ball of which 60% is direct labor cost Last year, the company sold 44.000 of these balls with the following results Sales (44,600 balls) $ 1,100,000 Variable expenses 660.000 Contribution margin 440,00 Fixed expenses 317,00 Net operating Income 5.123,000 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 tabor 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 years 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, $123,000, as last year? 4 Refet og 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 la), what selling price perball 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. o. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $123.000, as fast year? b. Assume the new plant is built and that next year the company manufactures and sells 44,000 bats (the same number as sold fast year). Prepare a contribution format income statement and compute the degree of operating leverage 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, whst 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. $123.000, 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. Ir Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement to), 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 built, how many balls will have to be sold next year to earn the same net operating income. $123.000, as last 6. Assume the new plant is built and that next year the company manufactures and sells 44,000 balls the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage year? Complete this question by entering your answers in the tabs below. ear to earn the same net operating income, $123,000, as last year? . Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), what selling price 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 ne would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant 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 built, how many balls will have to be sold next year to ea the same net operating income. $123,00 year? b. Assume the new plant is built and that next year the company manufactures and sells 44,000 balls (the same number year). Prepare a contribution format income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Req 5 ReqGA Req 68 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. (Round "Unit sales to break even" to the nearest whole unit and other answers to 2 decimal places.) CM Ratio % balls Unit sales to break even Degree of operating leverage Reg 1 Read Reg 3 Reg 4 Reg 5 Reg 6 Reg 6B 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? (Round "cm Ratio" to 2 decimal places and Unit sales to break even to the nearest whole unit.) CM Ratio 96 Unit sales to break even balls Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Req 5 Reg 6A Reg 6B 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, $123,000, as last year? (Round your answer to the nearest whole unit.) Number of balls 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, $123,000, 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 la), 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 built, how many balls will have to be sold next year to earn the same net operating income. $123,000, as last year? 6. Assume the new plant is built and that next year the company manufactures and sells 44,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reqs Req 6A Reg 68 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 la), what selling price per ball must it charge next year to cover the increased labor costs? (Round your answer to 2 decimal places.) Selling price year to earn the same net operating income. $123,000, 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 1a). 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 built, how many balls will have to be sold next year to earn the same net operating income, $123.000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 44,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 6B Refer to the original data. The company is discussing the constrution 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? (Round "CM Ratio" to 2 decimal places and "Unit sales to break even to the nearest whole unit.) Show less CM Ratio Unit sales to break even balls Ehange takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break point in balls? B. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be solc year to earn the same net operating income. $123,000, 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 la), what selling price pe 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 p would slash variable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is bu 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 built, how many balls will have to be sold next year to earn the same net operating income. $123,000, year? b. Assume the new plant is built and that next year the company manufactures and sells 44.000 balls (the same number as year). Prepare a contribution format income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. ho Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Req 6A Reg 68 If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $123,000, as last year? (Round your answer to the nearest whole unit.) Number of balls year to earn the same net operating income, $123,000, 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 1a). 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 built, how many balls will have to be sold next year to earn the same net operating income, $123,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 44,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage Complete this question by entering your answers in the tabs below. ces Reg1 Reg 2 Req3 Reg 4 Reg 5 Reg 6 Reg 68 Assume the new plant is built and that next year the company manufactures and sells 44.000 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 Degree of operating everage