The Alfonso Company Is Analyzing a Project with Expected Sales

question 305

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 contribution margin under the best case scenario?

• A) $9.00
• B) $9.18
• C) $9.90
• D) $10.08
• E) $10.26

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Definitions:

B.F. Skinner

An American psychologist and behaviorist known for his work in developing the theory of operant conditioning and for inventing the Skinner box.

Behaviorist

A psychologist who studies and applies principles of behaviorism, a theory that focuses on observable behaviors and discards theories involving the mind.

Cognitive Neuroscientist

A scientist who studies the biological processes and aspects that underlie cognition, with a particular focus on the neural connections in the brain which are involved in mental processes.

Introspection

The process of self-observation concerning one's psychological and emotional patterns.