| Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase variable costs for all sprinklers by an average of $0.80 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 485,000 sprinkler units at an average selling price of $27.20. The manufacturing costs are $7,211,860 variable and $1,837,756 fixed. Selling and administrative costs are $2,682,140 variable and $790,290 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio to 0 decimal places, e.g. 5% and Net income to 0 decimal places, e.g. 2,520.) | | Current | | | New | | | Effect | | Contribution margin ratio | | | % | | | % | | IncreaseDecrease | | by | | | % | Net income | | $ | | | $ | | | IncreaseDecrease | | by | | $ | | | | | |