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Olin Transmissions, Inc., has the following estimates for its new gear assembly project: price = $2,800 per unit; variable costs = $560 per unit; fixed
Olin Transmissions, Inc., has the following estimates for its new gear assembly project: price = $2,800 per unit; variable costs = $560 per unit; fixed costs = $3.0 million; quantity = 86,000 units. Suppose the company believes all of its estimates are accurate only to within 10 percent. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worst-case scenario?
Scenario | Units Sales | Unit Price | Unit Variable cost | Fixed Costs |
Base | $ | $ | $ | |
Best | ||||
Worst |
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