Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I just need the profit answer. Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for

image text in transcribed

I just need the profit answer.

Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are $7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio answers to 0 decimal places, e.g. 5% and net income answers to 2 decimal places, e.g. 5,275.25. eTextbook and Media Attempts: unlimited (b2) Your answer is partially correct. Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are $7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510 fixed. If the average unit sales price per sprinkler did not increase when the company began mass-producing the specialorder sprinkler, what would be the effect on the company? (Round ratio answer to 0 decimal places, e.g. 5% and profit answer to 2 decimal places, e.g. 5,275.25.) Contribution margin ratio by % Profit by $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting Manufacturing And Service Applications

Authors: Arnold Schneider, Harold M. Sollenberger

4th Edition

0759350426, 978-0759350427

More Books

Students also viewed these Accounting questions

Question

=+ What are the undesirable consequences?

Answered: 1 week ago