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 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 b. $16,625 c. $17,500 d. $17,850 e. $18,125
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter15: Decision Analysis
Section: Chapter Questions
Problem 5P: Hudson Corporation is considering three options for managing its data warehouse: continuing with its...
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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
b. $16,625
c. $17,500
d. $17,850
e. $18,125](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2f65b2e8-1346-43d3-9fbd-ff04385d4c40%2Fd727adee-cba3-4966-986d-fff73d87fc88%2F96soru_processed.jpeg&w=3840&q=75)
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
b. $16,625
c. $17,500
d. $17,850
e. $18,125
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