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 companys 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 637,000 units at an average selling price of $4.00 per unit. The variable costs were $1,783,600, and the fixed costs were $504,504.

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 $0.60 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 482,000 sprinkler units at an average selling price of $28.80. The manufacturing costs are $8,404,700 variable and $1,308,907 fixed. Selling and administrative costs are $2,700,580 variable and $808,600 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 0 decimal places, e.g. 2,520.)

Current Attempt in Progress 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 637,000 units at an average selling price of $4.00 per unit. The variable costs were $1,783,600, and the fixed costs were $504,504. (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 $0.60 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 482,000 sprinkler units at an average selling price of $28.80. The manufacturing costs are $8,404,700 variable and $1,308,907 fixed. Selling and administrative costs are $2,700,580 variable and $808,600 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 by % Profit by $ e Textbook and Media