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
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Question
Ef 19.
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
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