The vice$-$president of sales and marketing, Madison Tremblay, is trying to plan for the coming year in terms of production needs to meet the forecast sales. The board of directors is very supportive of any initiatives that will lead to increased operating income for the company in the upcoming year.InstructionsWaterways markets a simple water controller and timer that it mass$-$produces. During $2022,$ the company sold $350,000$ units at an average selling price of $$8$ per unit. The variable costs were $$1,575,000,$ and the fixed costs were $$800,000.$What is the products contribution margin ratio?What is the companys break$-$even point in sales units and in sales dollars for this product?What is the margin of safety, both in dollars and as a ratio?If management wanted to increase income from this product by $10\%,$ how many additional units would the company have to sell to reach this income level?If sales increase by $71,000$ units and the cost behaviours do not change, how much will income increase on this product?Waterways is considering mass$-$producing one of its special$-$order screens. This would increase variable costs for all screens by an average of $$0\mathrm{.}71$ per unit. The company also estimates that this change could increase the overall number of screens sold by $10\%,$ and the average sales price would increase by $$0\mathrm{.}25$ per unit. Waterways currently sells $491,740$ screen units at an average selling price of $$26\mathrm{.}50.$ The manufacturing costs are $$6,863,512$ variable and $$2,050,140$ fixed. Selling and administrative costs are $$2,661,352$ variable and $$794,950$ fixed.If Waterways begins mass$-$producing its special$-$order screens, how would this affect the company?If the average sales price per screen did not increase when the company began mass$-$producing the screen, what would be the effect on the company?Part $2$Waterways has a sales mix of sprinklers, valves, and controllers as follows:Annual expected sales:$$Sprinklers$450,000$ units at $$26\mathrm{.}50$Valves$1,500,000$ units at $$11\mathrm{.}20$Controllers$50,000$ units at $$42\mathrm{.}50$Variable manufacturing cost per unit:$$Sprinklers$$13\mathrm{.}96$Valves$7\mathrm{.}95$Controllers$29\mathrm{.}75$Fixed manufacturing overhead cost $($total$)$$$760,000$Variable selling and administrative expenses per unit:$$Sprinklers$$1\mathrm{.}30$Valves$0\mathrm{.}50$Controllers$3\mathrm{.}41$Fixed selling and administrative expenses $($total$)$$$1,600,000$InstructionsDetermine the sales mix based on unit sales for each product.Using the annual expected sales for these products, determine the weighted$-$average unit contribution margin for these three products. $($Round to two decimal places.$)$Assuming the sales mix remains the same, what is the break$-$even point in units for these products?Part $3$The section of Waterways that produces controllers for the company provided the following information:Sales $($in units$)$ for month of February$4,000$Variable manufacturing cost per unit$$29\mathrm{.}75$Sales price per unit$$42\mathrm{.}50$Fixed manufacturing overhead cost $($per month for controllers$)$$$18,000$Variable selling and administrative expenses per unit$$3\mathrm{.}41$Fixed selling and administrative expenses $($per month for controllers$)$$$13,122$InstructionsUsing this information for the controllers, determine the contribution margin ratio, the degree of operating leverage, the break$-$even point in dollars, and the margin of safety ratio for Waterways Corporation on this product.What does this information suggest if Waterways cost structure is the same for the company as a whole?