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Author Question: Franklin Company is in the process of evaluating a new part using the following information. Part ... (Read 82 times)

iveyjurea

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Franklin Company is in the process of evaluating a new part using the following information.
∙  Part SLC2002 has one production run each month, each with $18,000 in setup costs.
∙  Part SLC2002 incurred $40,000 in development costs and is expected to be produced over the next three years.
∙  Direct costs of producing Part SLC2002 are $56,000 per run of 24,000 parts each.
∙  Indirect manufacturing costs charged to each run are $88,000.
∙  Destination charges for each run average $15,000.
∙  Part SLC2002 is selling for $14.00 in the United States and $25 in all other countries. Sales are one-third domestic and two-thirds exported.
∙  Sales units equal production units each year. 

Required: 
a.What are the estimated life-cycle revenues?
b.What is the estimated life-cycle operating income for the first year? 


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Marked as best answer by iveyjurea on Mar 6, 2021

sarah_brady415

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iveyjurea

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Reply 2 on: Mar 6, 2021
Excellent


Dominic

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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