The Franklin Co

question 369

Multiple Choice

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 contribution margin under the base case scenario?

• A) $14.55
• B) $14.82
• C) $15.00
• D) $15.45
• E) $15.63

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Definitions:

Illusions

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MRI

Magnetic Resonance Imaging, a non-invasive medical imaging technique used to visualize detailed internal structures of the body.