The Adept Co

question 68

Multiple Choice

The Adept Co. is analyzing a proposed project. The company expects to sell 2,500 units, give or take 10%. The expected variable cost per unit is $8 and the expected fixed costs are $12,500. Cost estimates are considered accurate within a plus or minus 5% range. The depreciation expense is $4,000. The sale price is estimated at $16 a unit, give or take 2%. The company bases its sensitivity analysis on the expected case scenario.
-What is the contribution margin under the expected case scenario?

• A)$2.67
• B)$3.00
• C)$7.92
• D)$8.00
• E)$8.72

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Definitions:

Average Variable Costs

The sum of all costs that change with production volume, divided by the number of units produced.

Drones

Unmanned aerial vehicles (UAVs) controlled by remote pilots or autonomously by onboard computers, used for various purposes including surveillance, delivery, and photography.

Average Variable Costs

Costs that vary with the level of output produced, divided by the quantity of output produced.

Drones

Unmanned aerial vehicles (UAVs) that can be remotely controlled or fly autonomously through software-controlled flight plans in their embedded systems.