BACK NEXT! RCES Question 1 The Vice President for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales demand in the coming year. He is also trying to determine how the company's profits might be increased in the coming year. This problem asks you to use cost-volume-profit concepts to help Waterways understand contribution margins of some of its products and decide whether to mass-produce any of them. Waterways markets a simple water control and timer that it mass-produces. Last year, the company sold 635,000 units at an average selling price of $3.70 per unit. The variable costs were $1,409,700, and the fixed costs were $639,064. udy s x Your answer is incorrect. Try again. If sales increase by 54,000 units and the cost behaviors do not change, how much will income increase on this product? Income will increase by LINK TO TEXT LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase variable costs for all sprinklers by an average of $0.70 per unit. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the trage sales price would increase $0.20 per unit. Waterways currently sells 486,000 sprinkler units at an average selling price of $24.20. The manufacturing costs are $5,578,190 variable and $2,049,102 fixed. Selling and administrative costs are $2,654,650 variable and $805,150 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio to o decimal places, e.g. 5% and Net income to o decimal places, e.g. 2,520.) Current New Effect % % % by Contribution margin ratio x by Net income x Your answer is incorrect. Try again. Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase variable costs for all sprinklers by an average of $0.70 per unit. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average sales price would increase $0.20 per unit. Waterways currently sells 486,000 sprinkler units at an average selling price of $24.20. The manufacturing costs are $5,578,190 variable and $2,049,102 fixed. Selling and administrative costs are $2,654,650 variable and $805,150 fixed. If the average sales price per sprinkler unit did not increase when the company began mass-producing the special-order sprinkler, what would be the effect on the company? (Round answers to o decimal places, e.g. 5% or 2,520.) by % Contribution margin ratio Profit by Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT LINK TO TEXT LINK TO TEXT