i need the answer quickly Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for allsprinklers by an average of $0.70. The company also estimates that this change could increase the overall number of sprinklerssold by 10%, and the average unit sales price would increase $0.20. Waterways currently sells 490,000 sprinkler units at anaverage unit selling price of $24.40. The manufacturing costs are $5,760,440 variable and $2,101,930 fixed. Selling andadministrative costs are $2,608,760 variable and $806,080 fixed.If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio answers to Odecimal places, e.g. 5% and net income answers to 2 decimal places, e.g. 5,275.25.)Current30678790NewEffect36 %Decreaseby5.12%288120Increaseby

Contribution margin :— It is the difference between sales revenue and total variable cost.…

Answered: Waterways is thinking of mass-producing…

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 11E

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Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?
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 $0.60. 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 $ %
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