Webster United Is Considering Adding a New Product to Their

question 333

Multiple Choice

Webster United is considering adding a new product to their lineup. The company expects to sell 15,000 units, give or take 3 percent, of this item. The expected variable cost per unit is $12 and the expected total fixed cost is $21,000. The fixed and variable cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $22,000. The tax rate is 35 percent. The sale price is estimated at $15 a unit, give or take 2 percent.

What is the net income under the worst case scenario?

• A) -$13,495
• B) -$11,898
• C) -$9,043
• D) -$8,772
• E) -$4,209

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Definitions:

Agricultural Products

Goods that result from the cultivation of plants and the husbandry of animals, intended primarily for food, fiber, and raw materials.

Agricultural Products

Goods produced through farming activities, including crops, livestock, and other raw materials related to agriculture.

Short-Run Instability

Fluctuations in economic activity or prices that occur within a short period of time.

Agricultural Products

Items produced through farming and agriculture, including crops, livestock, and other raw materials.