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 751,000 units at an average selling price of $4.90 per unit. The variable costs were $2,575,930, and the fixed costs were $772,779. (a1) What is the products contribution margin ratio? (Round ratio to 0 decimal places, e.g. 25%.)

Contribution margin ratio Type your answer here % (a2) What is the companys break-even point in units and in dollars for this product?

Break-even point in units units Break-even point in dollars $ (a3) What is the margin of safety, both in dollars and as a ratio? (Round ratio to 0 decimal places, e.g. 25%.)

Margin of safety in dollars $ Margin of safety ratio % (a4) 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 Type your answer here units (a5) The parts of this question must be completed in order. This part will be available when you complete the part above. (b1) The parts of this question must be completed in order. This part will be available when you complete the part above. (b2) The parts of this question must be completed in order. This part will be available when you complete the part above.