Question
Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,230 per unit; variable cost = $450 per unit; fixed
Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,230 per unit; variable cost = $450 per unit; fixed costs = $4.96 million; quantity = 86,000 units. Suppose the company believes all of its estimates are accurate only to within 20 percent.
Required: What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? (Do not round intermediate calculations. Enter your answers in dollars, not millions of dollars. Round your answers to the nearest whole dollar amount (e.g.,1,234,567).)
Scenario | Unit Sales | Unit Price | Unit Variable Cost | Fixed Costs | |||
Base case | 86,000 | $ | 1,230 | $ | 450 | $ | 4,960,000 |
Best case | |||||||
Worst case | |||||||
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