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 32,250 of these balls, with the following results: Sales (32,250 balls) $ 806,250 Variable expenses 483,750 Contribution margin 322,500 Fixed expenses 222,600 Net operating income $ 99,900 Required