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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
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 501,000 sprinkler units at an average selling price of $25.60. The manufacturing costs are $6,993,400 variable and $1,729,325 fixed. Selling and administrative costs are $2,625,800 variable and $801,130 fred. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio to O decimal places, e.. 5% and Net Income to O decimal places, e.g. 2,520.) Current New Effect Contribution margin ratio Increase by Net income Increase by $
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