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 per ball, of which 60% is direct labor 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 Net operating income $ 750,000 450,000 300,000 210,000 $ 90,000 Reg 1 Reg 2 Reg 3 Req 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, $90,000, as last year? Number of balls UN SCHOMMY W W UCHUHE 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. Req 1 Req 2 Reg 3 Reg 4 Reg 5 Reg 6A Req 6B Assume the new plant is built and that next year the company manufactures and sells 30,000 balls (the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage Northwood Company Contribution Income Statement Degree of operating leverago