Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer b2 Vice President for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales demand in the coming year.

please answer b2
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
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 657,000 units at an average unit selling price of $4.40. The variable costs were $1,734,480, and the foxed costs were $809,424. (a1) What is the product's contribution margin ratio? (Round rotio to 0 decimal ploces, es. 25% ) What is the company's break-even point in sales units and in sales dollars for this product? Break-even point in units units Break-even point in dollars $ What is the margin of safety, both in dollars and as a ratio? (Round ratio to 0 decimal ploces, e.8 25\%.) Margin of safety in dollars Margin of safety ratio % 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 If sales increase by 52,000 units and the cost behaviors do not change, how much will income increase on this product? income will increase by 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%6, and the average unit sales price would increase $0.20. Waterways currently sells 493,000 sprinhler units at an average unit selling price of $26.20. The manufacturing costs are $7,004,760 variable and $1,754,947 fixed. 5 elling and administrative costs are $2,682,690 variable and $802.950 fixed If Waterways begins mass-producing its speciat-order sprinklers, how would this atfect the company? (Round ratio answers to O decimal places, es. 5% and net income answers to 2 decimal ploces, es. 5.275.25. Waterways is thinking of mass producing one of its special-order sprinkiers. To do so would increase urst variable costs for all sprinklers by an average of $070, The company also estimates that this change could increase the overali number of sprinklers. sold by 10% and the average unit sales price would increase $020. Waterways curremly sells 493000 aprinkier unifs at an average unit selling price of $26.20. The manufacturing costs are $7.004.760 varisble and 51.754 .947 haed Selling and administrative costs are $2.682.690 variable and $802.950 fxed If the average unit sales price per sprinkler did not increase when the compary began mass-producing the rpecialionder ipriniler. 5,275253 Contribution margin ratio Profit

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

Financial Accounting An Introduction To Concepts Methods And Uses

Authors: Clyde P. Stickney, Roman L. Weil

12th Edition

0324381980, 978-0324381986

More Books

Students also viewed these Accounting questions

Question

4-54. High profits are publicized by management.

Answered: 1 week ago