Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for all sprinklers by an average

Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for all sprinklers by an average of $0.80. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are $7,169,000 variable and $2,720,514 fixed. Selling and administrative costs are $2,608,600 variable and $796,520 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio answers to 0 decimal places, e.g. 5% and net income answers to 2 decimal places, e.g. 5,275.25.) Current % $ New % Effect by by $ %

Step by Step Solution

3.52 Rating (152 Votes )

There are 3 Steps involved in it

Step: 1

Assess the effect of massproducing the specialorder sprinklers on Waterways Current Unit Selling Pri... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting Tools for Business Decision Making

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly

4th Canadian edition

1118856996, 978-1118856994

More Books

Students also viewed these Accounting questions

Question

Briefly describe computer- assisted approaches to production.

Answered: 1 week ago

Question

Why is management of technology important?

Answered: 1 week ago