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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 57,000 of these balls, with the following results: Sales (57,000 balls) 1,995,000 1,396,500 Variable expenses Contribution margin 598,500 Fixed expenses 493,500 105,000 Net operating income Required: 1-a. Compute the CM ratio and the break-even point in balls. (Do not round intermediate calculations. Round up your final break even answers to the nearest whole number.) CM Ratio Unit sales to break even balls 1-b. Compute the the degree of operating leverage at last years sales level. (Round your answer to 2 decimal places.) Degree of operating everage

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