The Meldrum Co

question 69

Multiple Choice

The Meldrum Co. is analyzing a proposed project. The company expects to sell 3,000 units,give or take 15%. The expected variable cost per unit is $8 and the expected fixed costs are $12,500. Cost estimates are considered accurate within a plus or minus 5% range. The depreciation expense is $4,000. The sale price is estimated at $18 a unit,give or take 2%. The company bases its sensitivity analysis on the expected case scenario. What is the amount of the fixed cost per unit under the pessimistic case scenario?

• A) $4.17
• B) $4.66
• C) $5.15
• D) $5.35
• E) $6.02

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Definitions:

Disgust

A feeling of intense disgust or aversion triggered by something seen as repulsive or disagreeable.

Joy

Joy is a feeling of great pleasure and happiness, often arising from a sense of well-being or fulfillment.

Prefrontal Cortex

The part of the brain located at the front of the frontal lobe, associated with complex cognitive behavior, personality expression, decision making, and moderating social behavior.

Negative Emotions

Feelings that are generally perceived as unpleasant, such as sadness, anger, and fear, influencing both thought processes and behavior.