Webster United Is Considering Adding a New Product to Their

question 131

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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