Waterways markets a simple water control and timer that it, Ask an Expert

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Waterways markets a simple water control and timer that it mass-produces. During the year, the company sold 696,000 units at an average selling price of $4.22 per unit. The variable expenses were $2,053,200, and the fixed expenses were $683,338.

(1) What is the product's contribution margin ratio?
(2) What is the company's break-even point in units and in dollars for this product?
(3) What is the margin of safety, both in dollars and as a ratio?
(4) If management wanted to increase its income from this product by 10%, how many additional units would have to be sold to reach this income level?
(5) If sales increase by 71,090 units and the cost behaviors do not change, how much will income increase on this product?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9976166

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