Northwood Compony manufactures basketbals. The campany has a boll that selis for $25. At present, the bal is manufactured in a smail plaot that relies heavily on diect laber workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60x is direct labor cost. Last yeac, the compony sold 32,000 of these bals, with the folowing resues: Required: 1. Compute (a) last year's CM ratio and the break-even point in bals, and fbly ghe degree of operating leverage at last year's sales ievel. 2. Due to an increase in iabor rates, the company estimates that nest yeary variable expenses will increase by 53.00 per ball if this change takes place and the seling price per bal remains constant at \$25.00, what wil be next years CM rato and the break-even point in balis? 2. Aefer to the data in (2) above. If the expected change in voriable expenses takes place, how many bals will have to be sold next year to eain the same net operating income, $109.000, as last year? 4. Aefer ogain to the data in (2) above. The president feels that the company must raise the selling price of its basketbals, If Northwood Company wants to maintain the same CM tatio as last year (as computed in requirement tol, what selling price per bal must it charee next year to cover the increased labor costs? 5. Pefer to the original data. The compary 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 foed expenses per year to double. If the new plant is bult, 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 bult, how many balls wit have to be sold next year to ear the same net operating income, $109,009, as lsst year? b. Assume the new plant is built and that next year the company manufactures and sels 32,000 balls the same number as sold last yoar) Prepare a contribution format income statement and compute the degree of operating leverage: Complete this question by entering your anwwens in the tabs below