Southern Goods Is Analyzing a Proposed Project Using Standard Sensitivity

question 83

Multiple Choice

Southern Goods is analyzing a proposed project using standard sensitivity analysis.The company expects to sell 4,500 units,±11 percent.The expected variable cost per unit is $13 and the expected fixed costs are $12,000.Cost estimates are considered accurate within a ± 5 percent range.The depreciation expense is $5,000.The sale price is estimated at $22 a unit,±2 percent.
What is the amount of the fixed cost per unit under the pessimistic case scenario?

• A)$2.55
• B)$3.00
• C)$3.15
• D)$4.02
• E)$4.55

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