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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 $21.00 per ball, of which 60% is direct labor cost Last year, the company sold 54,000 of these balls, with the following results Sales (54,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $1,890,000 1,134,000 756,000 630,000 $ 126,000 Required Compute last year's CM ratio and the break-even point in balls. (Do not round intermediate calculations.) CM Ratio Unit sales to break even balls Compute the the degree of operating leverage at last year's sales level. (Round your answer to 2 decimal places.) Degree of operating Due to an increase in labor rates, the company estimates that next year's variable expenses will increase by $2.80 per ball. If this change takes place and the selling price per ball remains constant at $35.00, what will be next years CM ratio and the break-even point in balls? (Do not round intermediate calculations.) CM Ratio Unit sales to break evern balls 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, $126,000, as last year? (Do not round intermediate calculations. Round your answer to the nearest whole unit.) Number of balls

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