Cinram Machines Has the Following Estimates for Its New Gear

question 24

Multiple Choice

Cinram Machines has the following estimates for its new gear assembly project: price = $1,870 per unit; variable costs = $949 per unit; fixed costs = $1.4 million; quantity = 42,000 units.Suppose the company believes all of its estimates are accurate only to within ± 3 percent.What value should the company use for its total variable costs when performing its best-case scenario analysis?

• A)$38,578,064
• B)$39,822,128
• C)$38,216,051
• D)$41,802,137
• E)$40,864,538

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Definitions:

Inventory Cost

The total cost associated with holding and managing inventory, including storage, insurance, and obsolescence.

Building

A structure with a roof and walls, such as a house or factory, used for living, working, storage, or other purposes.

Scarce Resources

Resources that are limited in availability and cannot satisfy all wants and needs due to their limited supply.

Economics

The social science that studies how individuals, governments, firms, and nations make choices on allocating scarce resources to satisfy their unlimited wants.