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A proposed project has estimated sale units of 2,500, give or take 2 percent. The expected variable cost per unit is $6.79 and the expected fixed costs are $17,500. Cost estimates are considered accurate within a plus or minus 3 percent range. The depreciation expense is $2,850. The sale price is estimated at $15.40 a unit, give or take 3 percent. The company bases its sensitivity analysis on the expected case scenario. If a sensitivity analysis is conducted using a variable cost estimate of $7, what will be the total annual variable costs? a. $20,750 Marsich Company has the following information for September: Sales Variable cost of goods sold Fixed manufacturing costs $500,000 $235,000 $80,000 Variable selling and administrative expenses $45,000 Fixed selling and administrative expenses $30,000 Determine the following for Marsich Company for the month of September. 1. Manufacturing margin 2. Contribution margin 3. Income from operations b. $16,625 c. $17,500 d. $17,850 e. $18,125

A proposed project has estimated sale units of 2,500, give or take 2 percent. The expected variable cost per unit is $6.79 and the expected fixed costs are $17,500. Cost estimates are considered accurate within a plus or minus 3 percent range. The depreciation expense is $2,850. The sale price is estimated at $15.40 a unit, give or take 3 percent. The company bases its sensitivity analysis on the expected case scenario. If a sensitivity analysis is conducted using a variable cost estimate of $7, what will be the total annual variable costs? a. $20,750 Marsich Company has the following information for September: Sales Variable cost of goods sold Fixed manufacturing costs $500,000 $235,000 $80,000 Variable selling and administrative expenses $45,000 Fixed selling and administrative expenses $30,000 Determine the following for Marsich Company for the month of September. 1. Manufacturing margin 2. Contribution margin 3. Income from operations b. $16,625 c. $17,500 d. $17,850 e. $18,125

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A proposed project has estimated sale units of 2,500, give or take 2 percent. The expected variable cost per unit is $6.79 and the expected fixed costs are $17,500. Cost estimates are considered accurate within a plus or minus 3 percent range. The depreciation expense is $2,850. The sale price is estimated at $15.40 a unit, give or take 3 percent. The company bases its sensitivity analysis on the expected case scenario. If a sensitivity analysis is conducted using a variable cost estimate of $7, what will be the total annual variable costs? a. $20,750 Marsich Company has the following information for September: Sales Variable cost of goods sold Fixed manufacturing costs $500,000 $235,000 $80,000 Variable selling and administrative expenses $45,000 Fixed selling and administrative expenses $30,000 Determine the following for Marsich Company for the month of September. 1. Manufacturing margin 2. Contribution margin 3. Income from operations b. $16,625 c. $17,500 d. $17,850 e. $18,125
Transcribed Image Text:A proposed project has estimated sale units of 2,500, give or take 2 percent. The expected variable cost per unit is $6.79 and the expected fixed costs are $17,500. Cost estimates are considered accurate within a plus or minus 3 percent range. The depreciation expense is $2,850. The sale price is estimated at $15.40 a unit, give or take 3 percent. The company bases its sensitivity analysis on the expected case scenario. If a sensitivity analysis is conducted using a variable cost estimate of $7, what will be the total annual variable costs? a. $20,750 Marsich Company has the following information for September: Sales Variable cost of goods sold Fixed manufacturing costs $500,000 $235,000 $80,000 Variable selling and administrative expenses $45,000 Fixed selling and administrative expenses $30,000 Determine the following for Marsich Company for the month of September. 1. Manufacturing margin 2. Contribution margin 3. Income from operations b. $16,625 c. $17,500 d. $17,850 e. $18,125
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