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 variable costs for all sprinklers by an average of $0.60
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
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