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Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase variable costs for all sprinklers by an average of $0.70
Waterways is thinking of mass-producing one of its special-order sprinklers. 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 $0.20 per unit. Waterways currently sells 493,000 sprinkler units at an average selling price of $26.20. The manufacturing costs are $7,004,760 variable and $1,754,947 fixed. Selling and administrative costs are $2,682,690 variable and $802,950 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio to 0 decimal places, e.g. 5% and Net income to o decimal places, e.g. 2,520.) Current New Effect Contribution margin ratio 2511% Decrease AASA Net income 751988 81137.10 Increase by LINK TO TEXT LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Waterways is thinking of mass-producing one of its special-order sprinklers. 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 $0.20 per unit. Waterways currently sells 493,000 sprinkler units at an average selling price of $26.20. The manufacturing costs are $7,004,760 variable and $1,754,947 fixed. Selling and administrative costs are $2,682,690 variable and $802,950 fixed. If the average sales price per sprinkler unit did not increase when the company began mass-producing the special-order sprinkler, what would be the effect on the company? (Round answers to 0 decimal places, e.g. 5% or 2,520.) Contribution margin ratio Decrease Profit Decrease 28862.90
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