Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,160 per unit; variable cost = $380 per unit; fixed costs = $4.89 million; quantity = 79,000 units. Suppose the company believes all of its estimates are accurate only to within ±15 percent. What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? (Do not round intermediate calculations and enter your answers in dollars, not million, rounded to the nearest whole number, e.g., 1,234,567.) Scenario Unit Sales Unit Price Unit Variable Cost Fixed Costs Base case 79,000 2$ 1,160 2$ 380 %24 4,890,000 Best case rag the crossh over the area you want to Worst case

Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,160 per unit; variable cost = $380 per unit; fixed costs = $4.89 million; quantity = 79,000 units. Suppose the company believes all of its estimates are accurate only to within ±15 percent. What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? (Do not round intermediate calculations and enter your answers in dollars, not million, rounded to the nearest whole number, e.g., 1,234,567.) Scenario Unit Sales Unit Price Unit Variable Cost Fixed Costs Base case 79,000 2$ 1,160 2$ 380 %24 4,890,000 Best case rag the crossh over the area you want to Worst case

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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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Problem 9-18 Scenario Analysis (LO 3]
Automatic Transmissions, Inc., has the following estimates for its new gear assembly
project: price = $1,160 per unit; variable cost = $380 per unit; fixed costs = $4.89 million;
quantity = 79,000 units. Suppose the company believes all of its estimates are accurate
only to within ±15 percent. What values should the company use for the four variables
given here when it performs its best-case and worst-case scenario analysis? (Do not
round intermediate calculations and enter your answers in dollars, not million,
rounded to the nearest whole number, e.g., 1,234,567.)
Scenario
Unit Sales
Unit Price
Unit Variable Cost
Fixed Costs
Base case
79,000 $
1,160
380
$ 4,890,000
Tag the crosshairover the area you want to capture.
Best case
Worst case

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