CanDo SA Is Analyzing a Proposed Project

question 64

Multiple Choice

CanDo SA is analyzing a proposed project.The company expects to sell 12,000 units,give or take 4%.The expected variable cost per unit is €7 and the expected fixed cost is €36,000.The fixed and variable cost estimates are considered accurate within a plus or minus 6% range.The depreciation expense is €30,000.The tax rate is 34%.The sale price is estimated at €14 a unit,give or take 5%.The company bases its sensitivity analysis on the expected case scenario.What is the contribution margin for a sensitivity analysis using a variable cost per unit of €8?

• A)€3
• B)€4
• C)€5
• D)€6
• E)€7

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Definitions:

Inseparability

A characteristic of services indicating that they are produced and consumed at the same time, making the quality of service delivery directly linked to the service provider.

Co-Create

A collaborative process where consumers and companies work together to design, build, or develop new products or services.

Service Provider

An individual or company that offers specialized services to consumers or businesses in a specific area, such as telecommunications, education, or healthcare.

Inconsistency

The lack of steadiness and uniformity in actions, values, or outcomes, leading to unpredictability or variability.