The Alfonso Company is analyzing a project with expected sales of 4,000 units, give or take 5 percent. The expected variable cost per unit is $9 and the expected total fixed costs are $17,000. Cost estimates are considered accurate within a plus or minus 2 percent range. The depreciation expense is $3,000. The sale price is estimated at $18 a unit, give or take 5 percent. Sensitivity analysis is based on the most likely scenario.

What is the amount of the fixed cost per unit under the base case scenario?
A) $3.60
B) $3.80
C) $4.00
D) $4.10
E) $4.25

Question

The Alfonso Company is analyzing a project with expected sales of 4,000 units, give or take 5 percent. The expected variable cost per unit is $9 and the expected total fixed costs are $17,000. Cost estimates are considered accurate within a plus or minus 2 percent range. The depreciation expense is $3,000. The sale price is estimated at $18 a unit, give or take 5 percent. Sensitivity analysis is based on the most likely scenario.

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

What is the amount of the fixed cost per unit under the base case scenario?
A) $3.60
B) $3.80
C) $4.00
D) $4.10
E) $4.25

Quizplus · Accepted Answer

The Answer of The Alfonso Company is analyzing a project with expected sales of 4,000 units, give or take 5 percent. The expected variable cost per unit is $9 and the expected total fixed costs are $17,000. Cost estimates are considered accurate within a plus or minus 2 percent range. The depreciation expense is $3,000. The sale price is estimated at $18 a unit, give or take 5 percent. Sensitivity analysis is based on the most likely scenario.

What is the amount of the fixed cost per unit under the base case scenario?
A) $3.60
B) $3.80
C) $4.00
D) $4.10
E) $4.25

The Alfonso Company Is Analyzing a Project with Expected Sales