A proposed project has estimated sale units of 3,200, give or take 2 percent. The expected variable cost per unit is $5.85 and expected fixed costs are $22,000. Estimates are accurate within ±3%. The depreciation expense is $3,200. The sale price is $14.60 per unit, give or take 3 percent. The company uses sensitivity analysis based on the expected case. If a sensitivity analysis is conducted using a variable cost estimate of $6.25 per unit, what will be the total annual variable costs?

A proposed project has estimated sale units of 3,200, give or take 2 percent. The expected variable cost per unit is $5.85 and expected fixed costs are $22,000. Estimates are accurate within ±3%. The depreciation expense is $3,200. The sale price is $14.60 per unit, give or take 3 percent. The company uses sensitivity analysis based on the expected case. If a sensitivity analysis is conducted using a variable cost estimate of $6.25 per unit, what will be the total annual variable costs?

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

Chapter5: Probability: An Introduction To Modeling Uncertainty

Section: Chapter Questions

Problem 29P: The Siler Construction Company is about to bid on a new industrial construction project. To...

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