Vice President for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales demand in thecoming year. He is also trying to determine how the company's profits might be increased in the coming year. This problem asks you touse cost-volume-profit concepts to help Waterways understand contribution margins of some of its products and decide whether tomass-produce any of them.Waterways markets a simple water control and timer that it mass-produces. Last year, the company sold 635,000 units at an averageunit selling price of $5.00. The variable costs were $2,222,500, and the fixed costs were $619,125.(a1)Your answer is correct.What is the product's contribution margin ratio? (Round ratio to O decimal places, e.g. 25%.)Contribution margin ratio30%(a2)eTextbook and MediaYour answer is correct.What is the company's break-even point in sales units and in sales dollars for this product?Break-even point in units412750unitsBreak-even point in dollars2063750Attempts: unlimited

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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