You lead a project team that estimates sales of 3,500 units, 2 percent; price at $18.50 per unit, + 2 percent; variable costs per unit of $7.50, + 3 percent; annual fixed costs of $21,500, + 3 percent; and depreciation of $4,000 per year. Under the optimistic scenario, what will be the total annual variable costs? $25,972 $26,250 $26,578 $26,775