Your Company Is Reviewing a Project with Estimated Labor Costs

Multiple Choice

Your company is reviewing a project with estimated labor costs of $21.20 per unit, estimated raw material costs of $37.18 a unit, and estimated fixed costs of $20,000 a month. Sales are projected at 42,000 units over the one-year life of the project. All estimates are accurate within a range of plus or minus 5 percent. What are the total variable costs for the worst-case scenario?

A) $890,400
B) $1,561,560
C) $2,445,830
D) $2,451,960
E) $2,691,960