Automatic Transmissions, Inc., has the following estimates for its new gear asse

Question

Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1,170 per unit; variable cost = $390 per unit; fixed costs = $4.90 million; quantity = 80,000 units. Suppose the company believes all of its estimates are accurate only to within ± 15 percent.

What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? (Do not round intermediate calculations. Enter your answers in dollars, not millions of dollars. Round your answers to the nearest whole dollar amount (e.g.,1,234,567).)

Need best case and worst case for each one.

What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? (Do not round intermediate calculations. Enter your answers in dollars, not millions of dollars. Round your answers to the nearest whole dollar amount (e.g.,1,234,567).)

Need best case and worst case for each one.

Explanation / Answer

Scenario Unit Sales Unit price Unit variable cost Fixed costs   Base case 80000 1170 390 4900000   Best case =80000*1.15= 92000 =1170*.1.15 1345.5 =390*0.85 331.5 =4900000*0.85 4165000   Worst case =80000*0.85= 68000 =1170*.85 994.5 =390*1.15 448.5 =4900000*1.15 5635000

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