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How would this affect 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 501,000 sprinkler units at an average unit selling price of $28.60. The manufacturing costs are $8,831,600 variable and $1,395,533 fixed. Selling and administrative costs are $2,631,280 variable and $787,310 fixed.

If Waterways begins mass-producing its special-order sprinklers, how would this affect the company?

Reference no: EM133066564

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