Southern Goods Is Analyzing a Proposed Project Using Standard Sensitivity

question 34

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 sales revenue under the pessimistic case scenario?

• A)$97,020.00
• B)$73,120.00
• C)$86,347.80
• D)$88,110.00
• E)$107,692.20

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Definitions:

FCFS System

First Come, First Served, a queuing system where the first item or person to arrive is the first to be attended to.

Customer Arrival Rate

The frequency at which customers arrive at a service facility within a given time frame.

Customer Service Rate

A metric that measures how effectively a company or organization serves its customers, often evaluated through feedback and service resolution times.

Average Time

The mean value of a set of times; it represents the central tendency of time data.