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 timer that it mass-produces. Last year, the company sold 710.000 units at an average

selling price of $5.00 per unit. The variable costs were $2.130.000, and the fixed costs were $994,000.

(b2)

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 488,000 sprinkler

units at an average selling price of $26.00. The manufacturing costs are $6,270,990 variable and $2,315,866 fixed. Selling and

administrative costs are $2.610.610 variable and $810.160 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 ratio to 2 decimal places, e.g. 5.25% and profit to O decimal places, eg. 2,520.)

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 timer that it mass-produces. Last year, the company sold 710,000 units at an average selling price of $5.00 per unit. The variable costs were $2,130,000, and the fixed costs were $994,000. (62) 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 488,000 sprinkler units at an average selling price of $26.00. The manufacturing costs are $6,270,990 variable and $2,315,866 fixed. Selling and administrative costs are $2,610,610 variable and $810,160 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 ratio to 2 decimal places, e.g. 5.25% and profit to O decimal places, e.g. 2,520.) Contribution margin ratio Profit eTextbook and Medial Save for Later V by Attempts: 0 of 1 used Submit