Problem
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 mass-produces. Last year, the company sold 637,000 units at an average unit selling price of $4.30. The variable costs were $1,643,460, and the fixed costs were $712,166.
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?