Precise Machinery is analyzing a proposed project. The company expects to sell 2,300 units, give or take 5 percent.

Precise Machinery is analyzing a proposed project. The company expects to sell 2,300 units, give or take 5 percent. The expected variable cost per unit is $260 and the expected fixed costs are $589,000. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $129,000. The sales price is estimated at $750 per unit, plus or minus 3 percent. What is the sales revenue under the worst case scenario?    A.  $1,686,825 B.  $1,496,250 C.  $1,589,588 D.  $1,593,500 E.  $1,620,675 SalesWorst case = (2,300 × 0.95) × ($750 × .97) = $1,589,588

60.

Precise Machinery is analyzing a proposed project. The company expects to sell 2,100 units, give or take 5 percent. The expected variable cost per unit is $260 and the expected fixed costs are $589,000. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $129,000. The sales price is estimated at $750 per unit, give or take 2 percent. What is the contribution margin per unit under the best case scenario?    A.  $209.52 B.  $494.60 C.  $469.52 D.  $490.00 E.  $515.40 Contribution marginbest case = ($750 × 1.02) - ($260 × 0.96) = $515.40

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Precise Machinery is analyzing a proposed project. The company expects to sell 2,250 units, give or take 5 percent. The expected variable cost per unit is $260 and the expected fixed costs are $589,000. Cost estimates are considered accurate within a plus or minus 3 percent range. The depreciation expense is $129,000. The sales price is estimated at $750 per unit, give or take 2 percent. What is the amount of the total costs per unit under the worst case scenario?    A.  $548.58 B.  $551.62 C.  $604.16 D.  $638.23 E.  $640.25 Total costs per unitworst case = [(2,250 × 0.95) (260 × 1.03) + ($589,000 × 1.03)]/(2,250 × 0.95) = $551.62