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Author Question: Expo Manufacturing Inc., is in the process of evaluating a new product using the following ... (Read 84 times)

genevieve1028

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Question 1

An understanding of life-cycle costs can lead to which of the following?
◦ additional costs during the manufacturing cycle
◦ less need for evaluation of the competition
◦ the accumulation of information for strategically evaluating pricing decisions
◦ mutually beneficial relationships between buyers and sellers

Question 2

Expo Manufacturing Inc., is in the process of evaluating a new product using the following information:
∙  A new transformer has three production runs each year, each with $14,000 in setup costs.
∙  The new transformer incurred $50,000 in development costs and is expected to be produced over the next three years.
∙  Direct costs of producing the transformers are $55,000 per run of 5100 transformers each.
∙  Indirect manufacturing costs charged to each run are $55,000.
∙  Destination charges for each transformer average $4.00.
∙  Customer service expenses average $0.20 per transformer.
∙  The transformers are selling for $40 the first year and will increase by $2 each year thereafter.
∙  Sales units equal production units each year.

What are estimated life-cycle revenues?
◦ $612,000
◦ $1,254,600
◦ $1,897,200
◦ $1,927,800


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Marked as best answer by genevieve1028 on Mar 6, 2021

meryzewe

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genevieve1028

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Reply 2 on: Mar 6, 2021
Thanks for the timely response, appreciate it


jackie

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

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