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What would be the effect on the company

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Question - 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 493,000 sprinkler units at an average unit selling price of $26.20. The manufacturing costs are $7,004,760 variable and $1,754,947 fixed. Selling and administrative costs are $2,682,690 variable and $802,950 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?

Reference no: EM133185538

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