Answered step by step
Verified Expert Solution
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 of
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 $0.60. 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 500,000 sprinkler units at an average unit selling price of $25.80. The manufacturing costs are $6,976,770 variable and $1,75 1,261 xed. Selling and administrative costs are $2,698,230 variable and $804,370 xed. If the average unit sales price per sprinkler did not increase when the company began mass- producing the special-order sprinkler, what would be the effect on the company? (Round ratio answer to 0 decimal places, es. 5% and prot answer to 2 decimal places, e.g. 5,275.25.) Contribution margin ratio V by % Prot V by $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started