Wilson Sporting Goods 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: Sales (30,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $750,000 450,000 300,000 210,000 $90,000 Refer to the data in requirement 2. 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, $90,000, as last year? Number of balls (round answer to O decimal places):
Wilson Sporting Goods 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: Sales (30,000 balls) Variable expenses Contribution margin Fixed expenses Net operating income $750,000 450,000 300,000 210,000 $90,000 Refer to the data in requirement 2. 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, $90,000, as last year? Number of balls (round answer to O decimal places):
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Wilson Sporting Goods 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:
Sales (30,000 balls)
Variable expenses
Contribution margin
Fixed expenses
Net operating income
$750,000
450,000
300,000
210,000
$ 90,000
Refer to the data in requirement 2. 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,
$90,000, as last year?
Number of balls (round answer to 0 decimal places):
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