The Alfonso Company Is Analyzing a Project with Expected Sales

Multiple Choice

The Alfonso Company is analyzing a project with expected sales of 4,000 units, give or take 5 percent. The expected variable cost per unit is $9 and the expected total fixed costs are $17,000. Cost estimates are considered accurate within a plus or minus 2 percent range. The depreciation expense is $3,000. The sale price is estimated at $18 a unit, give or take 5 percent. Sensitivity analysis is based on the most likely scenario.

What is the amount of the total variable costs under the best case scenario?

A) $35,280
B) $36,720
C) $37,044
D) $37,918
E) $38,556