Northwood Company manufactures basketballs. The company has a ball that sells for $33. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $23.00 per bal of which 70% 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 int $ 990, 000 690, eoo 300, 000 $ 90, o00 Required: 2. Due to an increase in labor rates, the company estimates that next years variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $33.00, what 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, $90,000, 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 ba Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement la), what selling price per must it charge next year to cover the increased labor costs? the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant w0tild slash varahle ex nen es ner hall hv 30 30% hut it would cause fixed enensesnervear to douhle if the new niant is bulit what 1 or 1 12:00Guest