PROHL.RM +-21 Basic Cost-Volume-Profit Analysis; Break-Even Point; Cost Structure; Target Sales [L.01, L.02, L.O4, 1.05, L.06, L.08] Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct-labour workens. Thus, variable expenses are high, lotalling $15 per ball, of which 60% is direct labour cost. penses are high, lotalling 515 per ball, of which 60% is direct labour cost. Managerial Accounting. Canadian Edition 455 Chapter 4 Cost-Volume-Profit Relationships Last year the company sold 30,000 of these balls, with the following results: Sales. Variable expenses. Contribution magein. Fixed expences Operating income $750,000 450,000 300,000 210,000