Waterways Problem 05 The Vice President for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales demand in the coming year. He is also trying to determine how the company's profits might be increased in the coming year. This problem asks you to use cost-volume-profit concepts to help Waterways understand contribution margins of some of its products and decide whether to mass- produce any of them. Waterways markets a simple water control and timer that it mass-produces. Last year, the company sold 735,000 units at an average selling price of $3.60 per unit. The variable costs were $1,852,200, and the fixed costs were $508,032.

Waterways Problem os The Vice President for Sales and Marketing Waterways Corporation is planning for production needs to meet sales demand in the coming year. He is also trying to determine how the company's profits might be increased in the coming year. This problem asks you to use cost-volume profit concepts to help Waterways understand contribution margins of some of its products and decide whether to mass produce any of them. Waterways morts e simple water control and time that it mass produces. Last year, the company sold 735,000 units at an average saling price of 53.60 per unit. The variable costs were $1,852,200, and the fixed costs were $508,032. Your answer is correct. What is the product's contribution margin ratio (Round ratio to decimal placex es 234.) 30 Contribution margin ratio HOW TO SHOW ANSWER LINE TO TOT LINE TO TEXT LINK TO TAKT Your answer is correct What is the company's break-even point in units and in datars for this product? Break-even point in unite 470100 units Break-even point in dollars HOW DOLUTONOWANSWER LINK TO TEN IN TOT LOTENT You wer correct MacBook Pro CALCULATOR PRINTER VERSION Your answer is correct, What is the margin of safety, both in dollars and as a ratio? (Round ratio to o decimal places, .9. 25.) Margin of safety in dollars 952560 Margin of safety ratio 36% SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT LINK TO TEXT Your answer is correct. If management wanted to increase its income from this product by 10%, how many additional units would have to be sold to reach this income level? Waterways would have to sell an additional 26460 units SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT LINK TO TEXT x Your answer is incorrect. Try again. If sales increase by 53,000 units and the cost behaviors do not change, how much will income increase on this product? Income will increase by 20575.8 LINK TO TEET LINK TO TEXT LINK TO TORT Your answer is partially correct. Try again. 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 490,000 sprinkler units at an average selling price of $26.20. The manufacturing costs are $6,929,740 variable and $1,760,683 fixed. Selling and administrative costs are $2,698,760 variable and $790,940 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 % Decrease % by Net income increase LINK TO TEXT LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. 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 490,000 sprinkler units at an average selling price of $26.20. The manufacturing costs are $6,929,740 variable and $1,760,683 fixed. Selling and administrative costs are $2,698,760 variable and $790,940 fixed. If the average sales price per sprinkler unit did not increase when the company began mass-producing the special-order sprinkler, what would be the effect on the company? (Round answers to o decimal places, e.g. 5% or 2,520.) X % Contribution margin ratio by Increase EX Profit Decrease by Click if you would like to Show Work for this question: Open Show Work