Nu-Tek Is Analyzing a Proposed Project with Expected Sales of 5,800

question 33

Multiple Choice

Nu-Tek is analyzing a proposed project with expected sales of 5,800 units,±6 percent.The expected variable cost per unit is $11 and the expected fixed costs are $15,600.Cost estimates are considered accurate within a range of ±4 percent.The depreciation expense is $5,700.The sale price is estimated at $21 a unit,±1 percent.What is the sales revenue under the pessimistic case scenario?

• A)$120,582.00
• B)$116,120.21
• C)$113,347.08
• D)$108,110.00
• E)$114,492.00

Calculate and interpret the contribution margin and its relation to fixed costs and operating income.

Understand the concept of break-even point and how various costs and sales levels affect it.

Recognize the different types of costs (fixed, variable, mixed) and their impact on cost-volume-profit analysis.

Grasp the significance of contribution margin in determining break-even points and making profit-related decisions.

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