Homework Answers
Answer:-a)- Sales mix percentage -Sprinklers = (443952 units/1849800 units)*100 =24%
Valves= (1368852 units/1849800 units)*100 =74%
Controllers= (36996 units/$1849800 units)*100 =2%
Contribution margin per unit= Selling price per unit- Variable cost per unit
Sprinklers = $27 per unit-$14 per unit-$1 per unit =$12 per unit
Values = $11 per unit-$8 per unit-$1 per unit =$2 per unit
Controllers = $43 per unit-$30 per unit-$3 per unit =$10 per unit
b)-Weighted average contribution margin ratio =Contribution margin ratio* Sales mix percentage
= ($12 per unit*24%)+($2 per unit*74%)+($10 per unit*2%)
= $2.88 per unit+$1.48 per unit+$0.20 per unit
= $4.56 per unit
c)- Company’s Break even point in units= Fixed costs/ Weighted average contribution margin ratio
= $1691216/$4.56 per unit
= 370881 units
Total break even point in units=
Sprinklers = 370881 units*24 % =89011 units
Values = 370881 units*74 % =274452 units
Controllers = 370881 units*2% =7418 units
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Waterways has a sales mix of sprinklers, valves, and controllers as follows. Annual expected sales: Sale...
CVP waterways
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We were unable to transcribe this imageWaterways 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 $0.70 pe...
We were unable to transcribe this imageWaterways 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 $0.70 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 496,000 sprinkler units at an average selling price of $28.80. The manufacturing costs are $8,039,000 variable and...
The Vice President for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales dema...
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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 $0.70 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 497,000 sprinkler units at an average selling price of $25.60. The manufacturing costs are $6,925,390 variable and $1,733,086 fixed. Selling and administrative costs...
Waterways is thinking of mass-producing one of its special order sprinklers. To do so would increase variable costs for a sprinklers by an average of $0.70 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 481,000 sprinkler units at an average selling price of $25.20. The manufacturing costs are $5,811,160 variable and $2,155,660 fixed. Selling and administrative...
ne vice president for Sales and Marketing at Waterways Corporation is planning for production needs to meet sales demand in the coming year. He is also trying to determine how the company's profits might be increased in the coming year. This problem asks you to use cost volume profit concepts to help Waterways understand contribution margins of some of its products and decide whether to mass produce any of them. Waterways markets a simple water control and timer that it...
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