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Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase...

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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 $0.80 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 488,000 sprinkler units at an average selling price of $26.00. The manufacturing costs are $6,270,990 variable and $2,315,866 fixed. Selling and administrative costs are $2,610,610 variable and $810,160 fixed. If Waterways begins mass-producing its special-order sprinklers, how would this affect the company? (Round ratio to O decimal places, e.g. 5% and Net income to O decimal places, e.g. 2,520.) Current New Effect Contribution margin ratio 30 % 27 % Decrease by Net income $ $ Increase by ta $

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