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 = $2,050 per unit; variable costs = $145 per unit; fixed costs = $6,800,000; quantity = 75,000 units. Suppose the company believes all of its estimates are accurate only to within ±19 percent. Enter the values the company should use for the four variables given here when it performs its base-, best-, and worst-case scenario analysis. (Input the fixed costs in dollars, not in millions, e.g., $1,234,567. Do not include the dollar signs ($). Round your answers to 2 decimal places. (e.g., 32.16))

Olin Transmissions, Inc., has the following estimates for its new gear assembly project: price = $2,050 per unit; variable costs = $145 per unit; fixed costs = $6,800,000; quantity = 75,000 units. Suppose the company believes all of its estimates are accurate only to within ±19 percent. Enter the values the company should use for the four variables given here when it performs its base-, best-, and worst-case scenario analysis. (Input the fixed costs in dollars, not in millions, e.g., $1,234,567. Do not include the dollar signs ($). Round your answers to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Scenario Unit Sales Unit Price Variable Cost Fixed Costs   Base case     75,000 $2,050.00 $145.00 $6,800,000.00   Best case     89,250 $2,439.50 $117.45 $5,508,000.00   Worst case     60,750 $1,660.50 $172.55 $8,092,000.00

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