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 $0.70

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 $0.70 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 491, 740 sprinkler units at an average selling price of $26.50. The manufacturing costs are $6, 863, 512 variable and $2,050, 140 fixed. Selling and administrative costs are $2, 651, 657 variable and $794, 950 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio to 0 decimal places, e.g. 5% and Net income to 2 decimal places, e.g. 2, 520.25.)

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

Auditing An Assertions Approach

Authors: G. William Glezen, Donald H. Taylor

7th Edition

047113421X, 978-0471134213

More Books

Students also viewed these Accounting questions

Question

Interpret the quote in the contest of your own home?

Answered: 1 week ago

Question

=+Identify trends in the social media industry

Answered: 1 week ago