Northwood Company manufactures basketballs. The company has a ball that sells for $32. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totalling $22.40 per ball, of which 70% is direct labor cost. Last year, the company sold 52,000 of these balls, with the following results: Northwood Company manufactures basketballs. The company has a ball that sells for $32. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totalling $22.40 per ball, of which 70% is direct labor cost. Last year, the company sold 52,000 of these balls, with the following results: Due to an increase m labor rates, the company estimates that variable expenses will increase oy Si .60 per ball next year If this change takes place and the selling price per ball remains constant at 532.00. what will be the new CM ratio and break-even point in balls? (Do not round intermediate calculations.) Due to an increase in labor rates, the company estimates that variable expenses win increase oy S1.60 per ball next year If this change takes place and the selling price per ball remains constant at 532.00. what will be the new CM ratio and break-even point in balls? (Do not round intermediate calculations.) Refer to the data in (2) above If the expected change in variable expenses tBkes place, how many balls will have to be sold next year to earn the same net operating income. $76,800. as last year? (Do not round intermediate calculations. Round your answer to the nearest whole unit.) Number of balls Refer again to the data in (2) above The president feels that the company must raise the selling price at its basketballs. IT Northwood Company wants to maintain the same CM ratio as last year, what selling price per ball must it charge next year to cover the increased labor costs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Selling price Refer to the original data. The company is discussing the construction or a new. automated manufacturing plant. The new plant would slash variable expenses per ball by 20%. but it would cause fixed expenses per year to increase by 70%. it the new plant is built, what would be the company's new CM ratio any new break-even paint in balls? (Do not round intermediate calculations.) 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. $76,800. as last year? (Do not round intermediate calculations.) Number of balls Assume the new plant is built and that next year the company manufactures and sells 52.000 balls (the same number as sold last year). Prepare a contribution format income statement (Do not round your Intermediate calculations.) Compute the degree or operating leverage. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
