Sunset United Is Analyzing a Proposed Project

Multiple Choice

Sunset United is analyzing a proposed project.The company expects to sell 15,000 units,plus or minus 4 percent.The expected variable cost per unit is $120 and the expected fixed costs are $311,000.The fixed and variable cost estimates are considered accurate within a plus or minus 3 percent range.The depreciation expense is $74,000.The tax rate is 35 percent.The sales price is estimated at $170 a unit,plus or minus 2 percent.What is the contribution margin per unit for a sensitivity analysis using a variable cost per unit of $125?

A) $30
B) $45
C) $50
D) $24
E) $27