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 labor workers. Thus, variable expenses are high, totaling $15 per ball, of which 60% is direct labor cost. Last year, the company sold 30,000 of these balls, with the following results: $750,000 Sales (30,000 balls) Varlable expenses. . 450,000 Contribution margin Fixed expenses. 300,000 210,000 Net operating Income. $ 90,000
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 labor workers. Thus, variable expenses are high, totaling $15 per ball, of which 60% is direct labor cost. Last year, the company sold 30,000 of these balls, with the following results: $750,000 Sales (30,000 balls) Varlable expenses. . 450,000 Contribution margin Fixed expenses. 300,000 210,000 Net operating Income. $ 90,000
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 9E: Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs...
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need help in part d, e and f
Transcribed Image Text: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 labor workers. Thus, variable
expenses are high, totaling $15 per ball, of which 60% is direct labor cost.
Last year, the company sold 30,000 of these balls, with the following results:
$750,000
Sales (30,000 balls)
Varlable expenses. .
450,000
Contribution margin
Fixed expenses.
300,000
210,000
Net operating Income.
$ 90,000
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