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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
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 $21.00 per ball, of which 70% is direct labor cost. Last year, the company sold 53,000 of these balls, with the following results Sales (53,000 balls) Variable expenses $1,590,000 1,113,000 Contribution margin Fixed expenses 477,000 378,000 Net operating income $ 99,000 Required: 1-a. Compute last year's CM ratio and the break-even point in balls. (Do not round intermediate calculations. Round up your final break even answers to the nearest whole number) CM Ratio Unit sales to break even balls
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