Precise Machinery Is Analyzing a Proposed Project

question 100

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 contribution margin per unit under the best case scenario?

• A)$209.52
• B)$494.60
• C)$469.52
• D)$490.00
• E)$515.40

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Definitions:

Aluminum Refiner

A facility or process where bauxite ore is refined into aluminum, which is then used in a wide range of products and applications.

Weighted-Average Method

An inventory costing method where costs for inventory items are averaged over the period to calculate the cost of ending inventory and cost of goods sold.

Costs Per Equivalent Unit

The calculation used in the process costing system to allocate costs evenly among all units of production, considering both completed and partially completed units.

Assembly Department

A division within a manufacturing facility where components are put together to create a finished product.