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 variable costs for all sprinklers by an average of $0.60

image text in transcribed

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 $0.60 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 494,000 sprinkler units at an average selling price of $25.20. The manufacturing costs are $6,668,060 variable and $1,634,281 fixed. Selling and administrative costs are $2,668,540 variable and $807,700 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio to o decimal places, e.g. 5% and Net income to O decimal places, e.g. 2,520.) Current New Effect Contribution margin ratio by Net income $ by $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

Financial Accounting The Basics

Authors: Ilias Basioudis

1st Edition

1138605514, 9781138605510

More Books

Students also viewed these Accounting questions

Question

Calculate the cost per hire for each recruitment source.

Answered: 1 week ago

Question

What might be some advantages of using mobile recruiting?

Answered: 1 week ago

Question

What external methods of recruitment are available?

Answered: 1 week ago