How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Neo Your Own Question

Neo
Neo, Tutor
Category: Homework
Satisfied Customers: 12062
Experience:  BS Accounting
4224391
Type Your Homework Question Here...
Neo is online now
A new question is answered every 9 seconds

Neo, Could you complete the following accounting problems for

Resolved Question:

Neo, Could you complete the following accounting problems for me? I am willing to offer you a $25.00 bonus. Please inform me asap if this is possible.

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
costs 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:

Sales (30,000 balls). . . . . . . . . . . . . . . . . . $750,000
Variable expenses . . . . . . . . . . . . . . . . . . . 450,000
Contribution margin . . . . . . . . . . . . . . . . . . 300,000
Fixed expenses . . . . . . . . . . . . . . . . . . . . . 210,000
Net operating income . . . . . . . . . . . . . . . . $ 90,000



1. Compute (a) the CM ratio and the break-even point in balls, and (b) the degree of operating
leverage at last year’s sales level.

2. Due to an increase in labor rates, the company estimates that variable costs will increase by $3
per ball next year. If this change takes place and the selling price per ball remains constant at
$25, what will be the new CM ratio and break-even point in balls?

3. Refer to the data in (2) above. If the expected change in variable costs takes place, how many
balls will have to be sold next year to earn the same net operating income ($90,000) as last
year?

4. Refer again to the data in (2) above. The president feels that the company must raise the selling
price of its basketballs. If Northwood Company wants to maintain the same CM ratio as
last year, what selling price per ball must it charge next year to cover the increased labor
costs?

5. Refer to the original data. The company is discussing the construction of a new, automated
manufacturing plant. The new plant would slash variable costs per ball by 40%, but it would
cause fi xed costs per year to double. If the new plant is built, what would be the company’s
new CM ratio and new break-even point in balls?

6. Refer to the data in (5) above.

a. If the new plant is built, how many balls will have to be sold next year to earn the same
net operating income, $90,000, as last year?

b. Assume the new plant is built and that next year the company manufactures and sells
30,000 balls (the same number as sold last year). Prepare a contribution format income
statement and compute the degree of operating leverage.

c. If you were a member of top management, would you have been in favor of constructing
the new plant? Explain.
Submitted: 3 years ago.
Category: Homework
Expert:  Neo replied 3 years ago.
Good day!

Please download HERE.

Please do not forget to click the Accept button.

Thank you so much! :)
Neo, Tutor
Category: Homework
Satisfied Customers: 12062
Experience: BS Accounting
Neo and 12 other Homework Specialists are ready to help you
Customer: replied 3 years ago.
Neo I can download your file. Could you please submit the assignment in some other form.
Expert:  Neo replied 3 years ago.
THIS ANSWER IS LOCKED!
You can view this answer by clicking here to Register or Login and paying $3.
If you've already paid for this answer, simply Login.
Neo, Tutor
Category: Homework
Satisfied Customers: 12062
Experience: BS Accounting
Neo and 12 other Homework Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
< Last | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin Kernersville, NC
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther Woodstock, NY
  • Thank you so much for taking your time and knowledge to support my concerns. Not only did you answer my questions, you even took it a step further with replying with more pertinent information I needed to know. Robin Elkton, Maryland
  • He answered my question promptly and gave me accurate, detailed information. If all of your experts are half as good, you have a great thing going here. Diane Dallas, TX
 
 
 

Meet The Experts:

 
 
 
  • Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    4520
    More than 5000 online tutoring sessions.
< Last | Next >
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    4520
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/LI/lindaus/2012-6-10_04811_IMG20120609164157.64x64.jpg Linda_us's Avatar

    Linda_us

    Finance, Accounts & Homework Tutor

    Satisfied Customers:

    3121
    Post Graduate Diploma in Management (MBA)
  • http://ww2.justanswer.com/uploads/ComputersGuru/2010-02-13_051118_Photo41.JPG LogicPro's Avatar

    LogicPro

    Engineer

    Satisfied Customers:

    3035
    Expert in Java C++ C C# VB Javascript Design SQL HTML
  • http://ww2.justanswer.com/uploads/lanis/2009-4-1_233717_phput9xef_c1pm.jpg Lani S.'s Avatar

    Lani S.

    Tutor

    Satisfied Customers:

    2457
    Registered Nurse, Internet Researcher, Private Tutor
  • http://ww2.justanswer.com/uploads/chooser77/2009-08-18_162025_Chris.jpg Chris M.'s Avatar

    Chris M.

    M.S.W. Social Work

    Satisfied Customers:

    2341
    Master's Degree, strong math and writing skills, experience in one-on-one tutoring (college English)
  • http://ww2.justanswer.com/uploads/JawaadAhmed/2009-6-27_12137_SIs_SHadi.jpg F. Naz's Avatar

    F. Naz

    Chartered Accountant

    Satisfied Customers:

    1975
    Experience with chartered accountancy
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg Bizhelp's Avatar

    Bizhelp

    CPA

    Satisfied Customers:

    1873
    Bachelors Degree and CPA with Accounting work experience
 
 
 

Related Homework Questions