The Adept Co. is analyzing a proposed project. The company expects to sell 3,100 units, give or take 5 percent. The expected variable cost per unit is $9 and the expected fixed costs are $10,500. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $4,000. The sale price is estimated at $18 a unit, give or take 3 percent. What is the sales revenue under the optimistic case scenario?

Question

Business

Calvin Benton

28 October, 05:38

The Adept Co. is analyzing a proposed project. The company expects to sell 3,100 units, give or take 5 percent. The expected variable cost per unit is $9 and the expected fixed costs are $10,500. Cost estimates are considered accurate within a plus or minus 4 percent range. The depreciation expense is $4,000. The sale price is estimated at $18 a unit, give or take 3 percent. What is the sales revenue under the optimistic case scenario?

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Alberto Adams · Answer 1

sales revenue under optimistic condition will be of 60,347.7 dollars.

Explanation:

the optimistic case scenario will be if the company sales and price are higher than planned.

In this case:

units sold are 5% higher and; sales price is 3% higher:

Sales revenue: unit sold x unit price

unit sold: 3,100 x 1.05 = 3,255

unit price: 18 x 1.03 = $ 18.54

Sales revenue = 3,255 units x $ 18.54 = $ 60,347.7