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Northwood Company manufactures basketballs. The company has a ball that sells for $36. At present the ball is manufactured in a small plant that relies

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Northwood Company manufactures basketballs. The company has a ball that sells for $36. At present the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $25.20 per ball, of which 70% is direct labor cost. Last year, the company sold 52,000 of these balls, with the following results: Sales (52,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $ 1,872,000 1,310,400 561,600 453,600 $ 108,000 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 20%. but it would cause food expenses per year to increase by 70%. If the new plant is built, what would be the company's new CM ratio and new break-even point in bals? (Do not round Intermediate calculations. Round "Unit sales to break even to the nearest whole unit) CM Ratio Unit sales to break even 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, $108,000, as last year? (Do not round Intermediate calculations. Round your answer to the nearest whole unit.) Number of balls -1. Assume the new plant is built and that next year the company manufactures and sells $2,000 balls the same number as sold last year). Prepare a contribution format income statement (Do not round your intermediate calculations) Northwood Company Contribution Income Statement b-2. Compute the degree of operating leverage (Do not round intermediate calculations and round your final answer to 2 decimal places.) Degree of operang

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