The Franklin Co. is analyzing a proposed project. The company expects to sell 3,500 units, give or take 15 percent. The expected variable cost per unit is $6 and the expected fixed costs are $15,500. Cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $6,000. The sales price is estimated at $21 a unit, give or take 3 percent. The company bases their sensitivity analysis on the base case scenario

What is the amount of the fixed cost per unit under the best case scenario?
A) $3.47
B) $3.66
C) $3.85
D) $4.21
E) $4.43

Question

The Franklin Co. is analyzing a proposed project. The company expects to sell 3,500 units, give or take 15 percent. The expected variable cost per unit is $6 and the expected fixed costs are $15,500. Cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $6,000. The sales price is estimated at $21 a unit, give or take 3 percent. The company bases their sensitivity analysis on the base case scenario

What is the amount of the fixed cost per unit under the best case scenario?

What is the amount of the fixed cost per unit under the best case scenario?
A) $3.47
B) $3.66
C) $3.85
D) $4.21
E) $4.43

Quizplus · Accepted Answer

The Answer of The Franklin Co. is analyzing a proposed project. The company expects to sell 3,500 units, give or take 15 percent. The expected variable cost per unit is $6 and the expected fixed costs are $15,500. Cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $6,000. The sales price is estimated at $21 a unit, give or take 3 percent. The company bases their sensitivity analysis on the base case scenario

What is the amount of the fixed cost per unit under the best case scenario?
A) $3.47
B) $3.66
C) $3.85
D) $4.21
E) $4.43