Olin Transmissions, Inc., has the following estimates for its new gear assembly

Question

Olin Transmissions, Inc., has the following estimates for its new gear assembly project: price = $2,300 per unit; variable costs = $460 per unit; fixed costs = $4.2 million; quantity = 76,000 units. Suppose the company believes all of its estimates are accurate only to within

Olin Transmissions, Inc., has the following estimates for its new gear assembly project: price = $2,300 per unit; variable costs = $460 per unit; fixed costs = $4.2 million; quantity = 76,000 units. Suppose the company believes all of its estimates are accurate only to within

Explanation / Answer

the quantity sales= 76,000 units, selling price= $2,300 and variable cost per unit= $460 and fixed cost is $4,200,000.

in best case the values are:

quantity sales= 76,000*1.15= 87,400 units

selling price= 2,300*1.15= $2,645

variable cost= $460*1.15= $529

and the fixed cost= 4,200,000*1.15= $4,830,000

if the case is worst;

the unit sales= 76,000*0.85= 64,600 units

selling price= 2300*0.85= $1,955

variable cost= 460*0.85= $391

fixed cost= 4,200,000*0.85= $3,570,000

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