Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pkease help me Question 1 The Vice President for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales demand in

Pkease help me image text in transcribed
image text in transcribed
image text in transcribed
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 time that it mass-produces. Last year, the company sold 639,000 units at an average selling price of $4.60 per unit. The variable costs were $2,057,580, and the fixed costs were $573,183. What is the product's contribution margin ratio? (Round ratio to o decimal places, e.g. 25%) Contribution margin ratio 30% LINK TO TEXT LINK TO TEXT LINK TO TEXT What is the company's break even point in units and in dollars for this product? Break-even point in units 415350 units Break even point in dollars 1910610 LINK TO TEXT LINK TO TEXT LINK TO TEXT What is the margin of safety, both in dollars and as a ratio? (Round ratio to 0 decimal places, e.g. 2590) Margin of safety in dollars $ 1028790 Margin of safety ratio 32% LUK 10 TEXT LRTO TUT LINK TO TEXT If management wanted to increase its income from this product by 10%, how many additional units would have to be sold to reach this Income level? Waterways would have to sell an additional units LINK TO TEXT LINK TO TENI LINK TO TEXT If sales increase by 57,000 units and the cost behaviors do not change, how much will income increase on this product? Income will increase by $ 78660 LINK TO TEXT LINK TO TEXT LINK TO TEXT Waterways is thinking of mass producing one of its special order sprinkers. 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 484,000 sprinker units at an average selling price of $25.20. The manufacturing costs are $7,589,350 variable and $1,925.074 fixed. Selling and administrative costs are $2,647,250 variable and 5805,500 fixed. If Waterways begins mass producing its special-order sprinklers, how would this affect the company? (Round ratio to o decimal places, 0.0 59 and Net Income to o decimal places, e.g. 2,520.) Current Contribution margin ratio New Effect 90 Net Income by 6 by LINK TO TEXT LINK TO TEXT LINK TO TEXT Waterways is thinking of mass-producing one of its special-order sprinkers. 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 484,000 sprinkler units at an average selling price of $28.20. The manufacturing costs are $7,589,350 variable and $1,925,074 fixed. Selling and administrative costs are $2,647,250 variable and $805,500 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... 5% or 2,520.) Contribution margin ratio by Profit by s Click if you would like to Show Work for this question: Open Show Work

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Accounting Principles

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

10th Edition

978-0470534793

More Books