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Waterways is considering mass-producing one of its special-order screens. This would increase variable costs for all screens by an average of $0.79 per unit. The
Waterways is considering mass-producing one of its special-order screens. This would increase variable costs for all screens by an average of $0.79 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 $0.28 per unit. Waterways currently sells 546,000 screen units at an average selling price of $26.00. The manufacturing costs are $7,618,000 variable and $2,275,660 fixed. Selling and administrative costs are $2,974,400 variable and $882,390 fixed. If Waterways begins mass-producing its special-order screens, how would this affect the company? (Round contribution margin ratio to 1 decimal place, e.g. 15.2% and operating income to O decimal places, eg. 5,275.) Current New Contribution margin ratio % % Operating income $ $ nt New Effect % % by % $ by $ 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? (Round change in contribution margin ratio to 1 decimal place, e.g. 15.2% and change in profit to o decimal places, e.g. 5,275.) Contribution margin ratio will by %. Profit will by $
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