Analyzing a proposed project

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Reference no: EM131313057

The Meldrum Co. is analyzing a proposed project. The company expects to sell 3,000 units, give or take 15 percent. 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 percent range. The depreciation expense is $4,000. The sale price is estimated at $18 a unit, give or take 2 percent. The company bases its sensitivity analysis on the expected case scenario

The compnay conducts a sensitivity analysis using a variable cost of $9. The total variable cost estimate with be (Please show work):

a. $25,500

b. $22,950

c. $27,000

d. $24,000

e. $31,050

Reference no: EM131313057

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