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Nortwwood Company manufactares basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies

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Nortwwood Company manufactares basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavly on direct labor workers. Thus, variable expenses are high, totaling $15.00 per ball, of which 60% is direct labor cost. Last year, the compary sold 32,750 of these balls, with the following results: Required: 1. Compute (a) last year's CM ratio and the break-even point in balis, and (b) the degree of operating leverage at last year's sales level. 2. Due to an increase in labor rates, the compony 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 yeor's CM ratio and the break-even point in bois? 3. Refer to the data in requirement 2 . 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, $102,100, as last yoar? 4. Refer again to the data in requirement 2. The president feels that the compony must raise the selling price of its bosketbolis. If Northwood Company wants to maintain the same CM ratio as tast year (as computed in requirement lo). what selling price per ball must it charge next year to cover the increased labor costs? 5. Refer to the original data. The compeny is discussing the construction of a new, automated manufacturing plent, The now plant would slash variable expenses per ball by 40.00%, but it would cause ficed expenses per year to double. if the new plant is buil, what would be the company's new CM ratio and new break-even point in balls? 6. Refer to the data in requirement 5. a. If the new plant is built, how many balls will have to be soid next year to earn the same net operating income. $102,100, as last year? b. Assume the new plant is bult and that next year the company manufactures and selis 32.750 bols (the same number as sold lost year). Prepare a contribution format income statement and compute the depree of operating leverage. year? b. Assume the new plant is built and that next year the company manufactures and selis 32,750 balls (the same num 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. 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" up to the nearest whole unit and other answers to 2 decimal places.) next year to tarn the same net operating income, siv40.00%, 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 requirement 5. a. If the new plant is built, how many balis will have to be sold next year to earn the same net operating income, $102,100, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 32.750 balis (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. 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 round "Unit soles to break even" up to the nearest whole unit.) 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 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 requirement 2 . 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, \$102,100, as last year? 4. Refer again to the data in requirement 2 . 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 la), 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 siash 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 requirement 5. a. If the new plant is buil, how many bails will have to be sold next year to earn the same net operating income, $102,100, as last year? b. Assume the new plant is built and that next year the company manufactures and selis 32,750 balls ithe 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. Riefer to the data in requirement 2 . If the expected change in variable expenses takes place, how many balls will have to be sold next year to eam the same net operating income, $102,100, as last year? (Round your answer up to the nearest whole unit.) Requlire-d: 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 labor rates, the compony 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 requirement 2. If the expected change in variable expenses takes place, how mamy botls will have to be sold next year to earn the same net operating income, $102,500, as last year? 4. Refer again to the data in requirement 2 . The president feels that the company must raise the selling price of its basketballs. If Nortwwood Company wants to maintain the same CM rato as last year (as computed in requirement la) what selling price per balf must it charge next yoar 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 varkable expenses per ball by 40.00%, but it would cause fixed expenses per year to double. If the new plant is buil, what: would be the company's new CM ratio and new break-even point in bolis? 6. Refer to the data in requirement 5 . a. If the pew plant is built, how many balls will have to be sold next year to eam the same net operating income, 5102,100 , as last year? b. Assume the new plant is built and that next year the company manufactures and sells 32,750 balls lthe same number as sold last. year). Prepace a contribution format income statement and compute the degree of operating leverago. Complete this question by entering your answers in the tabs below. Fefer again to the data in requirement 2 . The president feels that the company must, raise the selling price of its basketballs. If Northwoed Company wants to maintain the same cM ratio as last year (as computed in requirement 1 ). what selling price per ball must it charge next year to cover the incressed lober cests? \{fleund your answer to 2 decimal places.) point in balls? 3. Refer to the data in requirement 2 . 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, $102,100, as last year? 4. Refer again to the data in requirement 2. 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 compony's new CM ratio and new break-even point in balls? 6. Refer to the data in requirement 5. a. If the new plant is built, how many balls will have to be sold next year to earn the same net operating income, $102,100, as last year? b. Assume the new plant is built and that next year the company manufactures and sells 32,750 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. 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 fxed 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? (Round "CM Ratio" to 2 decimal places and round "Unit soles to break even' up to the nearest whole unit.) point in balis? 3. Refer to the dota in requirement 2. 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, $102,100, as last year? 4. Refer again to the data in requirement 2 . The president feels that the company must raise the selling price of its basketballs. If Northwood Company wants to maintain the same CM rabo as last year (as computed in requirement fa), what selling price per ball must it charge next year to cover the increased labor costs? 5. Refer to the orighal 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 balis? 6. Aefer to the data in requirement 5 . a. If the new plant is bulit, how many balls will have to be sold next year to eam the same net operating income. $102:100, as last: year? b. Assume the new plant is bull and that next year the company manufoctures and sells 32,750 balls fhe same number as sold last. year). Prepare a contribution format income statement and compite the degree of operating leverago. Complete this question by entering your answers in the tabs below. Hefer to the dota in requirement 5. If the new plant is bult, how many balt wil have to be sold next vear to narn the same net operating income, $102,100, as inst year? (Round your anwwer up to the nearest whole unit.) year? b. Assume the new plant is built and that next year the company manufactures and sells 32,750 balls fthe same number as sold 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. Fiefer to the data in requirement 5. Assume the new piant is buit and that next year the company manufactures and sells 32,750 balis (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.)

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