Northwood Company manufactures basketballs. The company has a ball that sells for $34. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $20.40 per ball, of which 60% is direct labor cost. Last year, the company sold 53,000 of these bals, with the following results: Sales (53,000 balls) Variable expenses Contribution margin Fixed expenses $1,802,000 1,081 200 720,800 584 800 136,000