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Vice President for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales demand in the coming year. He is
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 657,000 units at an average unit selling price of $4.40. The variable costs were $1,734,480, and the fixed costs were $809,424. (a1) Your answer is correct. What is the product's contribution margin ratio? (Round ratio to O decimal places, e.g. 25%.) Contribution margin ratio (a2) eTextbook and Media % Your answer is correct. What is the company's break-even point in sales units and in sales dollars for this product? Break-even point in units 459,900 units Break-even point in dollars $ 2,023,560 (a3) eTextbook and Media Your answer is incorrect. What is the margin of safety, both in dollars and as a ratio? (Round ratio to O decimal places, e.g. 25%.) Margin of safety in dollars $ Margin of safety ratio Touthook and Media % Attempts: 1 of 2 used Attempts: 2 of 2 used
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