New town instruments is analyzing a proposed project. the company expects to sell 1,600 units, ±3 percent. the expected variable cost per unit is $220 and the expected fixed costs are $438,000. cost estimates are considered accurate within a ±2 percent range. the depreciation expense is $64,000. the sales price is estimated at $647 per unit, ±2 percent. what is the sales revenue under the worst-case scenario?

$ 125,032

Explanation:

Initial Escenario

TOTAL    Income StatementUnit  Quantity

$ 1,035,200Total Net Sales      $ 647  1.600  

-$ 352,000Variable Cost          $ 220  

-$ 64,000Depreciation Expenses  

$ 619,200Contributing Margin  

-$ 438,000Anual Fixed Costs  

$ 181,200Segment Margin  

Worst Case Escenario

Quantity fall 3% from 1,600 to 1,552

Price Fall 2% from $647 to $634

Variable Cost Increase 2% from $220 to $224

Anual Fixed Cost Increase 2% from $438,000 to $446,760

Depreciation Expenses maintained at the same level.

TOTALIncome StatementUnitQuantity

$ 984,061Total Net Sales$ 634  1.552  

-$ 348,269Variable Cost         $ 224  

-$ 64,000Depreciation Expenses  

$ 571,792Contributing Margin  

-$ 446,760Anual Fixed Costs  

$ 125,032Segment Margin  

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answer; foreign exchange transaction;