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Northwood Company manufactures basketballs. The company has a ball that sells for $35. At present,...

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Northwood Company manufactures basketballs. The company has a ball that sells for $35. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $24.50 per ball, of which 70% is direct labor cost Last year, the company sold 55,000 of these balls, with the following results Sales (55,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $1,925,000 1,347.500 577,500 472,500 S 105,000 Required 1-a. Compute last years CM ratio and the break-even point in balls. (Do not round intermediate calculations.) CM Ratio Unit sales to break even balls 1-b. Compute the the degree of operating leverage at last year's sales level. (Round your answer to 2 decimal places.) egree o ng 2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.50 per ball at $35.00, what will be next year's CM ratio and the break-even point in bals? (Do not round intermediate calculations.) this change takes place and the selling price per ball remains constant CM Ratio Unit sales to break even balls

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