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 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 $809,370 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio answers to O decimal places, e.g. 5X and net income answers to 2 decimal places, e.g. 5,275.25.) Contribution margin ratio Net income Current New % Effect Decrease Increase eTextbook and Media Save for Later Attempts: unlimited Submit Answer

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 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 $809,370 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio answers to O decimal places, e.g. 5X and net income answers to 2 decimal places, e.g. 5,275.25.) Contribution margin ratio Net income Current New % Effect Decrease Increase eTextbook and Media Save for Later Attempts: unlimited Submit Answer

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...

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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 $0.60. 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 489,000 sprinkler units at an average unit selling price of $28.20. The manufacturing costs are $8,393,890 variable and $1,283,761 fixed. Selling and administrative costs are $2,637,950 variable and $800,440 fixed. 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 O decimal places, e.g. 5% and profit answer to 2 decimal places, e.g. 5,275.25.) Contribution margin ratio Profit by by LA $ %
The Chimes Clock Company sells a particular clock for $40. The variable costs are $23 per clock and the breakeven point is 230 clocks. The company expects to sell 280 clocks this year. If the company actually sells 430 clocks, what effect would the sale of additional 150 clocks have on operating income? Explain your answer. The sale of an additional 150 clocks would operating income by the amount of The total effect would amount to
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Using sensitivity analysis The Circle Clock Company sells a particular clock for $25. The variable costs are $13 per clock and the breakeven point is 250 clocks. The company expects to sell 300 clocks this year. If the company actually Sells 400 clocks, what effect would the sale of additional 100 clocks have on operating income? Explain your answer.