Northwood Company manufactures basketballs. The company has a ball that sells for $30. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $18.00 per ball, of which 60% is direct labor cost. Last year, the company sold 50,000 of these balls, with the following results: Sales (50,000 balls) Variable expenses $1,500,000 900,000 Contribution margin Fixed expenses 600,000 480,000 Net operating income $ 120,000