Question
Project Z will result in unit sales of 2,250, at a price of $650 each. The variable cost (VC) of each unit is $325. The
Project Z will result in unit sales of 2,250, at a price of $650 each. The variable cost (VC) of each unit is $325. The cost accountant will allocate overhead on the existing plant to Project Z at a rate of $21 per unit. A special piece of equipment must be leased for $75,000 per year for purposes related solely to Project Z. Project Z will reduce sales of the same companys Project X by 900 units (selling price of $950 with variable cost of $510 and overhead allocation of $32 per unit). What is the total incremental cash flow for Project Z?
A.) $184,200
B.) $260,250
C.) $259,200
D.) $306,450
E.) $335,250
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