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:

Myers-Briggs Typology

A personality framework that categorizes individuals into 16 distinct personality types based on four dichotomies of preferences.

Thinking Type

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Psychographic Characteristics

Human characteristics that are qualitative rather than quantitative: values, beliefs, goals, and lifestyles.