Question
Please answer Part 2 (b) And please type your answer,hand-writing is sometimes hard to figure out Before mid-night thanks Part 1 Waterways has a sales
Please answer Part 2 (b)
And please type your answer,hand-writing is sometimes hard to figure out
Before mid-night thanks
Part 1
Waterways has a sales mix of sprinklers, valves, and controllers as follows.
Annual expected sales: Sale of sprinklers 460,000 units at $26.50
Sale of valves 1,480,000 units at $11.20
Sale of controllers 60,000 units at $42.50
Variable manufacturing cost per unit: Sprinklers $13.96
Valves $ 7.95 Controllers $29.75
Fixed manufacturing overhead cost (total) $760,000
Variable selling and administrative expenses per unit: Sprinklers $1.30 Valves $0.50 Controllers $3.41 Fixed selling and administrative expenses (total) $1,600,000 Instructions
Part 2
The section of Waterways that produces controllers for the company provided the following information. Sales for month of February: 4,000 Variable manufacturing cost per unit: $9.75 Sales price per unit: $42.50 Fixed manufacturing overhead cost (per month for controllers): $81,000 Variable selling and administrative expenses per unit: $3.00 Fixed selling and administrative expenses (per month for controllers): $13,122 Instructions
(a) Using this information for the controllers, determine the contribution margin ratio, the degree of operating leverage, the break-even point in dollars, and the margin of safety ratio for Waterways Corporation on this product.
(b) What does this information suggest if Waterways cost structure is the same for the company as a whole?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started