The Adept Co

Multiple Choice

The Adept Co. is analyzing a proposed project. The company expects to sell 2,500 units,give or take 10%. 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 $16 a unit,give or take 2%. The company bases its sensitivity analysis on the expected case scenario What is the contribution margin under the expected case scenario?

A) $2.67
B) $3.00
C) $7.92
D) $8.00
E) $8.72