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In: Accounting
Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: price = $3,100...
Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: price = $3,100 per unit; variable costs = $620 per unit; fixed costs = $4.4 million; quantity = 92,000 units. Suppose the company believes all of its estimates are accurate only to within ±15 percent? Scenario Units Sales Unit Price Unit Variable cost Fixed Costs Base $ $ $
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| Unit Sales | Unit Price | Unit VC | Fixed Cost | ||||||||||
| Scenario | Calculation | Units | Calculation | $ | Calculation | $ | Calculation | $ | |||||
| Base | $ 92,000 | $ 3,100 | $ 620 | $ 4,400,000 | |||||||||
| Best | 92000+15% | $ 105,800 | 3100+15% | $ 3,565 | 620-15% | $ 527 | 4400000-15% | $ 3,740,000 | |||||
| Worst | 92000-15% | $ 78,200 | 3100-15% | $ 2,635 | 620+15% | $ 713 | 4400000+15% | $ 5,060,000 | |||||
ekkarill92 answered 2 years agoRelated Solutions
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shown below relating to a proposed new investment project. The
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machine with a cost of $335,200, a 5-year life and no salvage
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Annual cash sales
$
350,000
Annual out-of-pocket cash expenses
$
250,000
Annual depreciation on equipment
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C.A.S. has two production departments, Assembly and Customizing. The company used the following estimates to calculate...
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Assembly
Customizing
Total machine
hours
19,000
15,000
Direct labor
hours
4,000
6,000
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$63,000
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-
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hour
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hour
Labor hour
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