Question
3.The Alfonso Company is analyzing a project with expected sales of 4,000 units, give or take 5 percent. The expected variable cost per unit is
3.The Alfonso Company is analyzing a project with expected sales of 4,000 units, give or take 5 percent. The expected variable cost per unit is $9 and the expected total fixed costs are $17,000. Cost estimates are considered accurate within a plus or minus 2 percent range. The depreciation expense is $3,000. The sale price is estimated at $18 a unit, give or take 5 percent. Sensitivity analysis is based on the most likely scenario. (5 marks)
a)What is the amount of the total variable costs under the best case?
b)What is the sales revenue under the worst case scenario?
c)What is the contribution margin under the best case scenario?
d)What is the amount of the fixed cost per unit under the base case scenario?
e)The company is conducting a sensitivity analysis on the sales price using a sales price estimate of $19. Using this value, the earnings before interest and taxes will be:
Display the calculation plz! use excel if possible!
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