Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variablecosts for all sprinklers by an average of $0.70. The company also estimates that this change could increase theoverall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterwayscurrently sells 490.000 sprinkler units at an average unit selling price of $28.60. The manufacturing costs are$7,866,260 variable and $2.011,486 fixed. Selling and administrative costs are $2,644.240 variable and $809,370fixed.If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Roundratio answers to O decimal places, e.g. 5X and net income answers to 2 decimal places, e.g.5,275.25.)Contributionmargin ratioNet incomeCurrentNew%EffectDecreaseIncreaseeTextbook and MediaSave for LaterAttempts: unlimited Submit Answer

CurrentNew EffectContribution Margin Ratio 25%23%DecreaseNet Income$ 682,644.00$…

Answered: Waterways is thinking of mass-producing…

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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