Question
1. A company is analyzing a proposed project. The company expects to sell 3,299 units plus or minus 4.00%. The expected VC per unit is
1. A company is analyzing a proposed project. The company expects to sell 3,299 units plus or minus 4.00%. The expected VC per unit is $11 and the expected FC are $12,500. Cost estimates are considered accurate within plus or minus 2%. The depreciation expense is $2,000. The sale price is estimated at $19 a unit plus or minus. What is the contribution margin under the expected case scenario?
2. A proposed project has estimated sale units of 2,499 plus or minus 2%. The expected variable cost per unit is $6.79 and the expected FC are $17,500. Cost estimates are considered accurate within (+/-)3%. The depreciation expense is $2,850. The sale price is estimated at $15.40 a unit, (+/-)3%. The company bases its sensitivity analysis on the expected case scenario. If a sensitivity analysis is conducted using a VC estimate of $7, what will be the total annual VCs?
3. A project has earnings before interest and taxes of $5,750, fixed costs of $50,000, a selling price of $13 a unit, and a sales quantity of 11,500 units. Depreciation is $7,500. What is the variable cost per unit?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started