Your answer is correct. Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase variable costs for all sprinklers by an average of $0.60 per unit. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average sales price would increase $0.20 per unit. Waterways currently sells 500,000 sprinkler units at an average selling price of $25.80. The manufacturing costs are $6,976,770 variable and $1,751,261 fixed. Selling and administrative costs are $2,698,230 variable and $804,370 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio to 0 decimal places, e.g. 5% and Net income to 0 decimal places, e.g. 2,520.) Current New Effect Contribution margin ratio 25 % 23 % Decrease + by 2| % Net income 669369 771869 Increase by 102500 SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase variable costs for all sprinklers by an average of $0.60 per unit. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average sales price would increase $0.20 per unit. Waterways currently sells 500,000 sprinkler units at an average selling price of $25.80. The manufacturing costs are $6,976,770 variable and $1,751,261 fixed. Selling and administrative costs are $2,698,230 variable and $804,370 fixed. If the average sales price per sprinkler unit did not increase when the company began mass-producing the special-order sprinkler, what would be the effect on the company? (Round answers to 2 decimal places, e.g. 5.25% or 2,520.25.) Contribution margin ratio Decrease by 2 % Profit Decrease + by 102500 Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT LINK TO TEXT LINK TO TEXT