Quiz 6 (Ch. 7)The Meldrum Co. is analyzing a proposed project. The company expects to sell 3,000 units, give or take 15%. 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 $18/unit, give or take 2%. What is the amount of the fixed cost per unit under the worst-case scenario?
13

Quiz 6 (Ch. 7)Assume a project has these estimated values: Sales quantity of 4,600 units, plus or minus 2%; variable cost per unit of $17, plus or minus 3%; fixed costs of $46,900, plus or minus 1%; depreciation of $17,300; and a sales price of $39/unit, plus or minus 10%. The tax rate is 34%. The company bases its sensitivity analysis on the expected case scenario. What will be the operating cash flow for a sensitivity analysis based on a sales price of $35/unit?
14

Quiz 6 (Ch. 7)CC’s is analyzing a proposed project with anticipated sales of 3,620 units, give or take 5% at a sales price of $24, plus or minus 2%. The variable cost per unit is $14.60, plus or minus 4%, and the fixed costs are $12,900, plus or minus 1%. The depreciation expense is $8,100. If the company conducts a sensitivity analysis using a variable cost of $16, the total variable cost estimate will be:
15

Quiz 6 (Ch. 7)A firm is reviewing a project with a labor cost of $18.90 per unit, raw materials cost of $21.63/unit, and fixed costs of $8,000 a month. Sales are projected at 7,200 units total for the 3-year life of the project. What are the total variable costs per year?
16

Quiz 6 (Ch. 7)A project has earnings before interest and taxes of $5,750, fixed costs of $50,000, a selling price of $13/unit, and a sales quantity of 11,500 units. Depreciation is $7,500. What is the variable cost per unit?
17

Quiz 6 (Ch. 7)At a production level of 5,600 units, a project has total costs of $89,000. The variable cost per unit is $11.20. What is the amount of the total fixed costs?
18

Quiz 6 (Ch. 7)A project has a contribution margin of $2.16 per unit. If the sales price per unit is $11 and the fixed costs are $24,700, what is the amount of total costs at a production level of 6,000 units?
19

Quiz 6 (Ch. 7)Wilson's Meats has fixed costs of $.60 for every pound of meat it sells given a sales level of 32,500 pounds. It charges $3.89 per pound of top-grade ground beef. The variable cost per pound is $2.99. If depreciation is $16,400, what is the accounting profit break-even point?
20