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I am so confused on how to solve this! any help would be appreciated! Waterways is thinking of mass-producing one of its special-order sprinklers. To
I am so confused on how to solve this! any help would be appreciated!
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 496,000 sprinkler units at an average selling price of $28.80. The manufacturing costs are $8,039,000 variable and $2,100,879 fixed. Selling and administrative costs are $2,674,600 variable and $793,460 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 0 decimal places, e.g. 2,520.) Current New Effect Contribution margin ratio % % by % Net income by 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 496,000 sprinkler units at an average selling price of $28.80. The manufacturing costs are $8,039,000 variable and $2,100,879 fixed. Selling and administrative costs are $2,674,600 variable and $793,460 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 0 decimal places, e.g. 5% or 2,520.) Contribution margin ratio by % 39 Profit byStep by Step Solution
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