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 495,000 sprinkler units at an average selling price of $25.80. The manufacturing costs are $6,954,830 variable and $1,723,025 fixed. Selling and administrative costs are $2,623,420 variable and $807,800 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?

CONTRIBUTION MARGIN RATIO	INCREASE / DECREASE	BY	________%
PROFIT	INCREASE / DECREASE	BY	$________