Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need answers to two boxes both answers in boxes are wrong Current Attempt in Progress Vice President for Sales and Marketing at Waterways Corporation is

image text in transcribedimage text in transcribed

need answers to two boxes both answers in boxes are wrong

Current Attempt in Progress 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 unit selling price of $3.70. The variable costs were $1,409,700, and the fixed costs were $639,064. 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 486,000 sprinkler units at an average unit 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 unit sales price per sprinkler did not increase when the company began mass-producing the special-order 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

Auditing Business Continuity Global Best Practices

Authors: Rolf Von Roessing

1st Edition

1931332150, 978-1931332156

More Books

Students also viewed these Accounting questions