Precise Machinery Is Analyzing a Proposed Project

question 23

Multiple Choice

Precise Machinery is analyzing a proposed project. The company expects to sell 2,100 units, give or take 5 percent. The expected variable cost per unit is $260 and the expected fixed costs are $589,000. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $129,000. The sales price is estimated at $750 per unit, give or take 2 percent. What is the amount of the total costs per unit under the worst case scenario?

• A)$548.58
• B)$577.45
• C)$604.16
• D)$638.23
• E)$640.25

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Definitions:

Beef

A type of meat obtained from cattle.

Pork

Pork refers to the culinary name for meat derived from domestic pigs, used in various dishes worldwide.

Pounds

A unit of weight measurement in the British imperial and US customary systems, equal to 16 ounces.

Steel Washers

Thin plates with holes that are normally used to distribute the load of a threaded fastener, such as a screw or nut.