PROBLEM 5-20 CVP Applications: Break-Even Analysis; Cost Structure; Torget Sales (3) LO5-1, (9) LO5-2, (9)...
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PROBLEM 5-20 CVP Applications: Break-Even Analysis; Cost Structure; Torget Sales (3) LO5-1, (9) LO5-2, (9) LO5-3, Northwoed Company manufactores a bssketball setlisg for $25 per unit in a small plant hemby relying on direct laber workers. Thus, variable expenses are high, totaling 515 per ball, of which 60 s is direct labor cost. Last yeat, the compary wold 30.000 balls, with the following retult: . Required: 2. Doe to an increase is labor rates, the conpary estimater eext jear's variable expenses will inctease by $3 per ball. If this chande tales place and the selling price pet ball tentains ceostant at \$25. what wat be next year CM atio and the breakeveo point in balln? eari the same net operating incoene. 590.000 , as last yean nest year to cover the increased tabor couts
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