Northwood Company manufactures basketballs. The company has a ball that sells for S35. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $21.00 per ball, of which 60% is direct labor cost Last year, the company sold 54,000 of these balls, with the following results Sales (54,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $1,890,000 1.134,000 630,000 126,000 Refer again to the data in (2) above. The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last year (as computed in requirement 1a), 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.) price Refer to the original data. The company is discussing the construction of a new, automated manufacturing plant. The new plant would slash variable expenses per ball by 40%, butt would cause fixed expenses per year to increase by 89% lf the new plant is built, what would be the company's new M ratio and new break-even point in balls? Do not round intermediate calculations. Round "Unit sales to break even" to the nearest whole unit.) CM Rato Unit sales to break even balls Refer to the data a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $126,000, as last year? (Do not round intermediate calculations. Round your answer to the nearest whole unit.) of balls b-1. Assume the new plant is built and that next year the company manufactures and sells 54,000 balls (the same number as sold last year). Prepare a contribution format income statement (Do not round your intermediate Contribution Income Statement b-2. Compute the degree of operating leverage. (Do not round intermediate calculations and round your final answer to 2 decimal places.) THE IS NUMBER TWO TO SATISFY THE FIRST PART OF THE ABOVE QUESTION. 2. Due to an increase in labor rates, the company estimates that next years variable expenses will increase by $2.80 per ball. If this change takes place and the selling price per ball remains constant at $35.00, what will be next years CM ratio and the break-even point in balls? (Do not round intermediate calculations.) CM Ratio 32% Unit sales to break even 58,250 bals