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 42,000 of these balls, with the following results: Sales (42,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $1,050,000 630,000 420,000 266,000 $ 154,000 Co u nty ons wil dve to be sold next year to earn the same net operating income, $154,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 42,000 balls the same number as sold last 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. Reg 1 Req 2 Reg 3 Req 4 Reqs Req 6A Req6B If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $154,000, as last year? (Round your answer to the nearest whole unit.) Number of balls 35,000 Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req3 Req 4 Req5 Req 6A Req 6B Assume the new plant is built and that next year the company manufactures and sells 42,000 balls the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. (Round "Degree of operating leverage" to 2 decimal places.) Sales Northwood Company Contribution Income Statement $ 1,050,000 Variable expenses Contribution margin 1,050,000 Fixed expenses Net operating income $ 1,050,000 Degree of operating leverage