A proposed project has estimated sale units of 2,500, give or take 2 percent.. The expected variable cost per unit is $6.79 and the expected fixed costs are $17,500. Cost estimates are considered accurate within a plus or minus 3 percent range. The depreciation expense is $2,850. The sale price is estimated at $15.40 a unit, give or take 3 percent. The company bases its sensitivity analysis on the expected case scenario. If a sensitivity analysis is conducted using a variable cost estimate of $7, what will be the total annual variable costs?
$20,750
$17,500
$16,625
$18,125
$17,850