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 labot workers. Thus, varlable expenses are high, totaling $15.00 per ball, of which 60 fo is direct labor cost. Last year, the eompary soid 48,000 of these balls, whih the following results Required: 1. Compute (a) last year's CM ratio and the break-even point in balis, and (0) the degree of cperating leverage at last year's stales level. 2. Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $3.00 per bail. If this change takes place and the selling price per bal remains constant at $25.00, what will be next year's CM ratio and the break-even point in balis? 3. Refer to the data in (2) above. 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, $142,000, as last year? 4. Refer again to the datain (2) above. The prevident feeis that the company must raise the seling price of its basketbalis. If Nortwwood Company wans to maintain the same CM ratio as fast year fos computed in requaremeat lay, what setilng price per ball must it charge next year to cover the increased labor costs? 5. Refer to the ofiginal data. The company is discussing the construction of a new, automated manufacturing plant. The new piant would slash varioble expenses per bal by 4000%, but it would couse fred 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. Reler to the data in (5) above. a. It the new plant is built, how mary baits wil have to be sold next year to earn the same net operating income, $142.000, as last year? b. Assume the new pant is buin and that next year the company manufoctures and sells 46,000 bals the same number as sold last year) Pregare a contribution format income statement and complate the degree of operating leverage. Comglete this question by entering your anweers in the tabs below. Northwood Company manufactures basketbals. The compary has a balk that selis for $25. mt present, the ball is manufactured in a small plant that folns heaviy on direct taboe workers. This, variable expenses are high, totaling $15.00 per ball, of which 60% is direct. tabor cost. Last year, the company sald 46,000 of these bais, with the following results: Pecuired: 1. Compote (a) lost years CM rakio and the break-even point in bals, and (b) the degree of operating leverage at last year's sales level 2. Due to en increase in labor fates, the company estimates that next year's variable expenses will increase by 33 . change takes place and the selting grice per ball remains constant at 525.00, what will be next year's CM ratio and the break-eyen peint in bain? 3. Reder po the data in (2) above. If the expected change in variable expenses takes place, how mamy balls will have to be sold next year to eam the same net operalind income, 5142,000, as last year? 4. peser egain to the data in (2) above. The president feek that the compary must raise the selling price of its basketbaits. If Northwood Compory wats 10 maintain the same CM ratio as iast year (as computed in feculfement 1a) what selling peice pear boll thust li charge next year to cover the increased labot costs? 5. Peler to the orinal data. The company h discussing the construction of a new, automated manuatacturing olant. The new plant would sianh variable experses per baft by 4000 , but it weuld caune faed expenses peryear to double. If the rew plant is built, what Would be the company's new CM ratio and new break.ever point in balis? 6. Peice to the dota in (b) bbove. a. W the new plant is buil. how many bads will hrye to be sold next year fo earn the same net operating income, 3142,000 , as iast. year? 6. Astime the neN plant is buift and that next year the company manufactures and setis t6,000 balis che same number as sold last yean Prepare a contribution farmat income statement and compute the degree of aperating leverade. Complete this auestion by entering yoer answers in the tabe belewi Nocthwood Compary manufactures basketbais. The company has a bail that seils for $25. At present, the ball is manufactured in a smak phant that retles heayly on direct laber workers. Thus, variable expenseg ore high. totaling $15 o0 per ball, of which 60% is direct Labor cost. Last year, the company sold 46000 of these balls, with the following results: Required: 1. Compute (d) last years CM rmio 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 fakes, the company estimates that next year's variable expenses will increase by $3.00 per ball. if this change takes place and the seling price per ball femains constant at 52500 , what wit be next year's CM ratio and the break-even boin in balle? 3. Reler to the dain in (2) hbove. If the expected chango in variable expenses takes place. how many balls will have to be sold next year io earn the some net cperasing income. $142.000, as last year? 4. Reler again to the data in (2) above. The president feels that the company must raise the seiling price of its basketbalis. If Northwood Compary wants to maintain the same CM ratio as last yoar fas computed in requirement lal, what selling price per bail mest it charge nent year to cover the increased labor costs? 5. Refer to the original data. The company is discusing the constructon of a new, automated manufacturing piant. Thak new plant woild slash variable expenses per ball by a0 oox, but if would cause fued expenses per year to double. If the new piant is built, what would be the company's new CM ratio and new break rever point in balis? 6. Reser to the dasa in (5) abowe a If the new piont is built. how many balls will have to be salit nens year to earn the same net operafing income, $ ta2, ooo, as last. Yo ar? b. Asume the new plan is built and that nest yoar the compsry manufactures and selis a6o00 balls pthe same number as sold kast year Pregare a cohtsibutian format heome statement and compute the degree of operating leverage. Complete this questien by entering your anwwers in the tabs below. Qeier to the dota in (?) abese. Hr the eapected change in variable expenses takes pace, hom many bails withave to be sold? Northwood Company manufactures basketoalts. The company has a ball that setis for 525 . At present, the bati is manufactured in a smail plant that reties heavily on direct Labor workers. Thus, variable expenses ore hiph, fotaling 515.00 per bali, of which 60 sis is difect tabor cost. Last year, the company sold 46,000 of these balis, with the following results: Required: 1. Compute (a) last years CM ratio and the break-even point in balk, and (b) the degree of operating leverage at last year's sales level. 2. Due to an increase in iabor tates, the company estimates that next year's variable expenses wit increase by $3.00 per bail. If this change takes place and the setling price per ball remains constant at $25.00, what wil be next year's cM tatio and the break-ewen point in balie? 3. Refer to the data in (2) above. If the expected change in variable expenses takes piace, how many bails will have to be sold next year to earn the same net obeeating heome, $142,000, as last year? 4. Peter again to the data in {2 sbowe The president feets that the company must raise the setang price of as basketbalis. If Nothwood Compary wants to maintsin the same CM ratio as last year (a1 computed in fequitement 1a), what seliring price per bat) munt in charge nent year to cover the increased lsbor costs? 5. Pefer to the original data. The cempany is discussing the construction of a new, automated manufacturing plant. The fiew plant. would slash variable expenses per bail by 4000x, but it would cause fived exgenses per year to double. If the new plant is buili. what would be the company's new CM ratio and new bre ak even point in balis? 6. Pefor 19 the data in (5) above. a. If the new plont is buit, How many bahi win have to be sold next year to earn the same net operating income. 3142,000 , as last year? 6. Asume the new plant is bulit and that next year the company manufactures and sell 46 opo balis pihe saret number as soid last Year) Prepsie a contribution format income starement and compute the degreo of operating leverage. Complate this questien by entering your answers in the tabs below. Meter again to the data in (2) above. The oreddent feels that the company must raise the seing price of ita batketbalis. If Northwood Company manufactures basketbais. The company has a ball that seils for. $25. At present, the bali is manufactured in a small plant that relies heavily on direct labor workers. Thais, variable trepenses are high, totating $15.00 per ball, of which fok is direct isbor cost. Last year, the company sold 46.000 of these balls, with the following results: Aequiredi 1. Compute (o) lastyears CM ralio and the break-even point in balk, and (b) the degres of operating lewerage at last year's saies level 2. Due to an increase in labor rotes. the company estimates that nent year's yariable expentes will increase by 5300 per ball. If this. change takes place and the selilng price per bail remairis constont at 525.00, what wil be next year's CM ratio and the break-even point in bals? 3. Refer to the data in (2) above If the exnected change in variable expenses takes place. how many balis will have to be soled next year to eisn the same net operating income, 9142,000 , as last year? 4. Reter again to the datain (2) above The president feeis that the compamy must raise the sei'ng price of its basketbais. If. Nothurood Company wants 10 maintain the same CM ratio as iast year (as computed in reguitement fal. what seiling price per bati miast it charge next year to cover the increased Labor costs? 5. Refer to the original data The compary is discussing the construction of a new, butomated manufacturing plant, The new plant weuld be the combany's new CM ratio ard new break-even point in balis? 6 Refer to the data in (5) above. a. If the new blant is buit, how niamy bats whithve to be sold next year to eam the same net operating income, 3 hap o00 as last year? b. Assume the new plark is buit arid that newt yest the company manufactiares and selis 46,000 basis (the same fumber as sold last? Yeat) Prease a contribition format income statement and conpute the degree of operating feverabe Complete this question ley entering rour anwerers in the tabs below: RAfer to the original data. The cempany is discusaing the construction of a ren, automated manufacturing plant. The new Bant weuld slash vamable espenses per ball by 4000%, but it would cause fixed erpenses per year ta double. If the new. plant is built, what would be the company's few CM ratio and new break-even polit in batis? (kound "cM Hatic" fo? 2 decimal) Nortivood Conpany manufactures baskefbalis. The company has a ball that sesls for $25, At present, the bali is manufactured in a wersla plant that rethes heavily on dired labor woekers. Thus. variable expenses are high, totaling $1500 per boil, of which 60% is difect labot cost Last year, the comosny sold 46,000 of treses balls, with the following rensults: Required: 1 Compute (a) last years CM rato and the breakeven point in babs, and fol the degree of cperating leverope at last year's sales level. 2. Due to an increase in labor rates, the compary estimates that next yoar's variabie exthenses will increase by 33.00 per bali. If this change takes place and the seing price per ball remains constant at 325.00, what will be next year's chatio and the break-even point in bass? 3. Resee to the data in (2) abowe. If the expected change in variable expenses takes place, how many thaifs will have to be sold next year to eam the same net operating income, 5182.000, as last year? 4. Refer bganto the data in (2) abcive. The president fees that the company muat raise the seling peice of its basicetballs. If Northwood Compary wants to mainain the same CM ratio as lastyear (as computed in requirem ent 1 a), what seiling price per bail must it charge next yest to cower the increased labor costs? 5. Relet to the origral data. The compary is discussing the construction of a new. autamated manufacturing pant. The new plant Woutd slash varisble expenses per bal by 40.00%, but a would cause fied expenses per yoar to double. If the new pant is built, what wound be the compony's new CM rasis and nerw break-ewen point in balls?. 6. Refer to the dath in (5) above a. If the new plant is buili, How mamy bain wir have 10 be sold next year to earn the same net operating income, $142,000, as last year? b. Assume the new pisnt is buit and that next year the company manufactures and seils 46,000 balls (the same number as soid last year Prepare a contributich formal income statement and compute the dedree of operating feverage. Complete this quesisn by entering your answers in the tabs below. If the row thant in buil; hise many talis wis have to be swid nest year to eaw the same net ogerating incomes $142, hoo, as Northwood Company manufactures basketbalis. The company has a ball that sells for $25. At present, the ball is manufactured in a smail piant that relies heavily on direct labor workers. Thus, varlable expenses are high, totaling $15.00 per bali, of which 60% is direct labor cost. Last year, the company sold 46,000 of these balis, 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 operoting 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 (2) above. If the expected change in variable expenses takes place, how many bails will have to be sold next. year to earn the same nel operating income, $142,000, as last year? 4. Refer again to the data in (2) above. The president feels that the company must ralse the selling price of its basketballs. If Northwood Company wants to maintain the same CM ratio as last yeor (as computed in requirement 1a), what selling price per ball must it charge nextycar to cover the increased labor costs? 5. Refer to the original data. The company is discussing the construction of a new, automated manufocturing 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 company's new CM ratio and new break-oven point in balls? 6. Refer to the data in (5) above. a. If the new pant is buili, how many balls wa have to be sold next year to earn the same net operating income, $142,000, as last year? 6. Assume the new plant is built and that next year the company manufoctures and sells 46,000 bafis (the same number as sold last yeari. Prepare a contribution format income statement and compute the degree of operating leverage. Complete this question by entering your answers in the tabs below. Assume the new plant is buiz and that nevt year the company manufactures and welis 46,000 balls (the same number as sold tast year). Presare a contrbution format income statement and compute the degree of operating feverage. (Round "Degree af beeating Liverage* to 2 decimial pilecrs