Northwood Company manufactures basketbolls. The company has a ball that sells for $25. At present the ball is manufactured in a small plant that roles Deavily on direct labor workers. Thus variable expenses are high totaling $15.00 pet ball of which 60% is direct labor cost. Last year the company sold 60,000 of these balls with the following results Sales (68,000 balls) $1,500,000 Variable expenses 0.00 Contribution serein 600.000 Fixed expenses 375 Net operating Incom 235.000 Required: 1. Compute (a) last year's CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year's sales level 2. Due to an increase in laborates the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00. what will be next year's CM catio and the break-even point in balls? 3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income $225.000, as last year? 4. Refer again to the data in ) above the president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the some CM ratlo as last year (as computed in requirement 10). What selling price per bal must it charge next year to cover the increased labor costs? 5. 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 4000%, but it would cause ford expenses per year to double. If the new plant is built what would be the company's new CM ratio and new break-even point in balls? 6. Refer to the data in (5) above a. If the new plant is bullt, how many balls will have to be sold next year to earn the same net operating income. $225.000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 60.000 balls (the same number as sold last year). Prepare a contibution format income statement and compute the degree of operating beverage. 1. Compute (a) last year's CM ratio and the break-even point in bolls, and (b) the degree of operating leverage at last year's sales level 2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? 3. Refer to the data in (2) above. If the expected change in varloble expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $225.000, as last year? 4. 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? 5. 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 40.00%, but it would cause fixed expenses per year to double. If the new plant is built what would be the company's new CM ratio and new break-even point in balls? 6. 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 $225.000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 60,000 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 Reg 2 Reg 3 Reg 4 Reg 68 Regs Reg 6 Compute (a) last year's CM ratio and the break even point in balls, and (b) the degree of operating leverage at last year's sales level. (Round "Unit sales to break even" to the nearest whole unit and other answers to 2 decimal places.) CM Ratio Unit sales to break even Degree of operating leverage balls 2. Due to an increase in labor rates, the company estimates that next years variable expenses will increase by $3.00 per ball, if this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break-even point in balls? 3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating Income. $225.000, as last year? 4. 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 (os computed in requirement 1a). what selling price per ball must it charge next year to cover the increased labor costs? 5. 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 40.00%, but it would cause fixed expenses per year to double. If the new plant is built, what would be the company's new CM ratio and new break-even point in balls? 6. 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. $225.000, as last year? 6. Assume the new plant is built and that next year the company manufactures and sells 60.000 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! Req 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 68 Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per ball. If this change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break even point in balls? (Round "CM Ratio to 2 decimal places and "Unit sales to break even to the nearest whole unit.) CM Ratio Unit sales to break even bals 2. Due to a change takes place and the selling price per ball remains constant at $25.00, what will be next year's CM ratio and the break even point in balls? 3. Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $225,000, as last year? 4. 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 ta), what selling price per ball must it charge next year to cover the increased labor costs? 5. 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 40.00%, but it would cause fixed expenses per year to double. If the new plant is built what would be the company's new CM ratio and new break-even point in balls? 6. 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 $225,000, as last b. Assume the new plant is built and that next year the company manufactures and sells 60,000 balls the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. year? Complete this question by entering your answers in the tabs below. Req! Reg 2 Regs Reg 4 Reg 5 Red A Reg 6B Refer to the data in (2) above. If the expected change in variable expenses takes place, how many balls will have to be sold next year to earn the same net operating income, $225,000, as last year? (Round your answer to the nearest whole unit.) Nurt of balls Hook Hint year to earn the same net operating income, $225.000, as last year! 4. 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 ta), what selling price per ball must it charge next year to cover the increased labor costs? 5. 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 40.00%, but it would cause fixed expenses per year to double. If the new plant is built what would be the company's new CM ratio and new break-even point in balls? 6. 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 $225.000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 60,000 balls the same number as sold last year). Prepare a contribution format income statement and compute the degree of operating leverage. ht ferences Complete this question by entering your answers in the tabs below. Reg2 Reo Req! Req4 Regs Reg 6 Reg 65 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? (Round your answer to 2 decimal places.) Solling price mustage next year to cover wou 5. 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 40.00%, but it would cause fixed expenses per year to double. If the new plant is built what would be the company's new CM ratlo and new break even point in balls? 6. 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 $225.000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 60.000 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. Rog1 Reg 2 Rog R4 Reqs Reg A Reg 68 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 40.00%, but it would cause foxed expenses per year to double. If the new plant is built, what would be the company's new CM ratio and new break even point in balls? (Round "CM Ratio" to 2 decimal places and unit sales to break even to the nearest who unit) Show less CM Ratio Unit sales to break even bols year? b. Assume the new plant is built and that next year the company manufactures and sells 60,000 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 2 Reg 1 Reg 3 Req4 Reg 5 Req 6A Reg 68 If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $225,000, as last year? (Round your answer to the nearest whole unit.) Number of bats C Reg 6 Reg 68 > would be the company's new CM ratio and new break-even point in an 6. 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 eat the same net operating income, $225,000, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 60,000 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 Reg 2 Reg 3 Reg4 Reg 5 Reg 6 Reg 60 Assume the new plant is built and that next year the company manufactures and sells 60,000 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) Northwood Company Contribution Income Statement Llege of operating leverage