Precise Machinery Is Analyzing a Proposed Project That Is Expected

question 90

Multiple Choice

Precise Machinery is analyzing a proposed project that is expected to have sales of 2,450 units, ±8 percent. The expected variable cost per unit is $246 and the expected fixed costs are $309,000. Cost estimates are considered accurate within a ±3 percent range. The depreciation expense is $106,000. The sales price is estimated at $599 per unit, ±2 percent. What is the amount of the total costs per unit under the worst-case scenario?

• A) $448.58
• B) $404.16
• C) $366.67
• D) $338.23
• E) $394.58

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