Precise Machinery is analyzing a proposed project. The company expects to sell 2,340 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 amount of the total costs per unit under the worst case scenario?

Respuesta :

Answer:

$545.96

Explanation:

What is the amount of the total costs per unit under the worst case scenario?

$577.45

Total costs per unit; worst case =

[($2340 * 0.95) (260 * 1.04) + ($589,000 * 1.04)]/(2,340 * 0.95) = $545.96