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 735,000 units at an average selling price of $3.60 per unit. The variable costs were $1,852,200, and the fixed costs were $508,032.
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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 margin 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 735,000 units at an average saling price of $3.60 per unit. The variable costs were 91.852,200, and the fixed costs were $508,032. What is the product's contribution margin ratio? (Round ratio to 0 decimal places, e.g. 25 ) Contribution margin ratio What is the company's break-even point in units and in dollars for this product? Break even point in units units Break-even point in dollars What is the margin of safety, both in dollars and as a ratio? (Round ratio to o decimal places, e.g. 256.) Margin of safety in dollars Margin of safety ratio 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 units If sales increase by 53,000 units and the cost behaviors do not change, how much will income increase on this product? Income will increase by Waterways is thinking of mass-producing one of its special-order sprinkers. To do so would increase variable costs for all sprinklers by an average of $0.70 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 50.20 per unit. Waterways currently sells 490,000 sprinkler units at an average selling price of $26.20. The manufacturing costs are $6,929,740 variable and $1,760,583 fixed. Selling and administrative costs are $2,598,760 variable and $790,940 fixed. If Waterways begins mass-producing its special-order sprinders, how would this affect the company? (Round ratio to o decimal places, c.9.5% and Net Income to o decimal places, c.9. 2.520.) Current New effect Contribution margin ratio Not income Waterways is thinking of mass producing one of its special order sprinders. To do so would increase variable costs for all sprinklers by an average of $0.70 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 50.20 per unit. Waterways currently sells 490,000 sprinkler units at an average selling price of $26.20. The manufacturing costs are $6,929,740 variable and $1,760,583 fixed. Selling and administrative costs are $2.699,760 variable and $790,940 fixed. If the average sales price per sprinkler unit did not increase when the company begon mass-producing the special-order sprinker, what would be the effect on the company? (Round answers to 2 decimal places, c.g. 5.25% or 2,520.25.) by Contribution margin ratio Profit Question Attemptsio of 3 used
