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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 496,000 sprinkler units at an average selling price of $28.0. The manufacturing costs are $8,039,000 variable and $2,100,879 fixed. Selling and administrative costs are $2,674,600 variable and $793,460 fixed Ir 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 0 decimal places, e.g. 2,520.) Current New Effect Contribution margin ratio Decrease by Net income by 67686 67721 Increase 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 496,000 sprinkler units at an average selling price of $28.0. The manufacturing costs are $8,039,000 variable and $2,100,879 fixed. Selling and administrative costs are $2,674,600 variable and $793,460 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, eg. 5% or 2,520.) Contribution margin ratio Profit
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