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 $0.80. 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 $27.20. The manufacturing costs are $7,211,860 variable and $1.837,756 fixed. Selling and administrative costs are $2,682,140 variable and $790,290 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio answers to decimal places, e.g. 5% and net income answers to 2 decimal places, e.g. 5,275.25.) Current 669369 % $ New 23 % 771869 Effect Decrease O Increase O by by $ 102500
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 $0.80. 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 $27.20. The manufacturing costs are $7,211,860 variable and $1.837,756 fixed. Selling and administrative costs are $2,682,140 variable and $790,290 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio answers to decimal places, e.g. 5% and net income answers to 2 decimal places, e.g. 5,275.25.) Current 669369 % $ New 23 % 771869 Effect Decrease O Increase O by by $ 102500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Ef 19.
![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 $0.80. 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 $27.20. The manufacturing costs are $7,211,860 variable and $1.837,756 fixed. Selling and
administrative costs are $2,682,140 variable and $790.290 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.)
Current
669369
%
$
New
23 %
771869
Effect
Decrease O
Increase C
by
by
$
2
102500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5cfca9fd-8d5a-4925-879a-c3fb2d3e710c%2Fb9184090-bbd8-4f97-bd30-d66c0dab7ab0%2Fc10bs2q_processed.png&w=3840&q=75)
Transcribed Image Text: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 $0.80. 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 $27.20. The manufacturing costs are $7,211,860 variable and $1.837,756 fixed. Selling and
administrative costs are $2,682,140 variable and $790.290 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.)
Current
669369
%
$
New
23 %
771869
Effect
Decrease O
Increase C
by
by
$
2
102500
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education