Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are $7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio answers to 0 decimal places, e.g. 5% and net income answers to 2 decimal places, e.g. 5,275.25.) Contribution margin ratio Net income $ eTextbook and Medial (b2) Current Your answer is partially correct. Contribution margin ratio Profit 666643 25 % Decrease Decrease $ by New 23 % Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are $7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510 fixed. by $ 749093 If the average unit sales price per sprinkler did not increase when the company began mass-producing the special- order sprinkler, what would be the effect on the company? (Round ratio answer to 0 decimal places, e.g. 5% and profit answer to 2 decimal places, e.g. 5,275.25.) Effect i Decrease Increase Attempts: unlimited %

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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Question
Please don't give image format
(b1)
Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable
costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the
overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways
currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are
$7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510
fixed.
Your answer is correct.
If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round
ratio answers to 0 decimal places, e.g. 5% and net income answers to 2 decimal places, e.g.
5,275.25.)
Contribution
margin ratio
Net income $
eTextbook and Media
(b2)
Your answer is partially correct.
Profit
Current
Contribution margin ratio
eTextbook and Media
666643
25 %
Decrease
Decrease
$
by
New
Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable
costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the
overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways
currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are
$7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510
fixed.
23 %
If the average unit sales price per sprinkler did not increase when the company began mass-producing the special-
order sprinkler, what would be the effect on the company? (Round ratio answer to 0 decimal places, e.g.
5% and profit answer to 2 decimal places, e.g. 5,275.25.)
by $
749093
Effect
Decrease
Increase
Attempts: unlimited
2 i %
Transcribed Image Text:(b1) Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are $7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510 fixed. Your answer is correct. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio answers to 0 decimal places, e.g. 5% and net income answers to 2 decimal places, e.g. 5,275.25.) Contribution margin ratio Net income $ eTextbook and Media (b2) Your answer is partially correct. Profit Current Contribution margin ratio eTextbook and Media 666643 25 % Decrease Decrease $ by New Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are $7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510 fixed. 23 % If the average unit sales price per sprinkler did not increase when the company began mass-producing the special- order sprinkler, what would be the effect on the company? (Round ratio answer to 0 decimal places, e.g. 5% and profit answer to 2 decimal places, e.g. 5,275.25.) by $ 749093 Effect Decrease Increase Attempts: unlimited 2 i %
(b1)
Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable
costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the
overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways
currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are
$7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510
fixed.
Your answer is correct.
If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round
ratio answers to 0 decimal places, e.g. 5% and net income answers to 2 decimal places, e.g.
5,275.25.)
Contribution
margin ratio
Net income $
eTextbook and Media
(b2)
Your answer is partially correct.
Profit
Current
Contribution margin ratio
eTextbook and Media
666643
25 %
Decrease
Decrease
$
by
New
Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable
costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the
overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways
currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are
$7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510
fixed.
23 %
If the average unit sales price per sprinkler did not increase when the company began mass-producing the special-
order sprinkler, what would be the effect on the company? (Round ratio answer to 0 decimal places, e.g.
5% and profit answer to 2 decimal places, e.g. 5,275.25.)
by $
749093
Effect
Decrease
Increase
Attempts: unlimited
2 i %
Transcribed Image Text:(b1) Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are $7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510 fixed. Your answer is correct. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio answers to 0 decimal places, e.g. 5% and net income answers to 2 decimal places, e.g. 5,275.25.) Contribution margin ratio Net income $ eTextbook and Media (b2) Your answer is partially correct. Profit Current Contribution margin ratio eTextbook and Media 666643 25 % Decrease Decrease $ by New Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for all sprinklers by an average of $0.70. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways currently sells 485,000 sprinkler units at an average unit selling price of $28.80. The manufacturing costs are $7,783,330 variable and $2,021,847 fixed. Selling and administrative costs are $2,692,670 variable and $803,510 fixed. 23 % If the average unit sales price per sprinkler did not increase when the company began mass-producing the special- order sprinkler, what would be the effect on the company? (Round ratio answer to 0 decimal places, e.g. 5% and profit answer to 2 decimal places, e.g. 5,275.25.) by $ 749093 Effect Decrease Increase Attempts: unlimited 2 i %
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