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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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