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Your company is reviewing a project with estimated labor costs of $14.68 per unit, estimated raw...

Your company is reviewing a project with estimated labor costs of $14.68 per unit, estimated raw material costs of $43.18 a unit, and estimated fixed costs of $18,000 a month. Sales are projected at 15,500 units, ±5 percent, over the one-year life of the project. Cost estimates are accurate within a range of ±3 percent. What are the total variable costs for the best-case scenario?

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Answer:

Under best case scenario we use the 97% accuracy with material costs and labour costs multiplied with the units involved

Total variable costsbest-case = [($14.68 + 43.18) (.97) (15,500) (1.05) Total variable costsBest-case = $913,

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