HW LO 38 39 PROBLEM 3-20 Various CVP Questions: Break-Even Point; Cost Structure; Target Sales...
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HW LO 38 39 PROBLEM 3-20 Various CVP Questions: Break-Even Point; Cost Structure; Target Sales (L03-1, LO3-3, LO3-4, L03-5, LO3-6, LO3-8] 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 labor workers. Thus. variable expenses are high, totaling S15 per ball of which 60% is direct labor cost. Last year, the company sold 30,000 of these balls, with the following results: Sales (30,000 balls) Variable expenses Contribution margin Fixed expenses... Net operating income $750,000 450,000 300,000 210.000 $ 90,000 Requirent 3. Refer to the data in requirement 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, 590.000. as last year
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