The Alfonso Company Is Analyzing a Project with Expected Sales

question 229

Multiple Choice

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

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Definitions:

Certified Check

A type of check for which the issuing bank guarantees the availability of funds by verifying the drawer's signature and setting aside the check amount.

Bank's Signature

An authorized signature from a bank representative, used to validate or authorize transactions and documents.

Certified Checks

Checks guaranteed by a bank, verifying that the signature is genuine and that the check writer has sufficient funds in their account.

Day Of Deposit

The day on which funds are deposited into a bank account, which starts the process of the funds being cleared and made available for use.