Use the information below to answer the following question(s).
Satellite Inc. is in the process of evaluating its new products. A new signal receiver has two production runs each year, each with $20,000 in setup costs. The new receiver incurred $60,000 in development costs and is expected to be produced for three years. The direct costs of producing the receivers are $80,000 per run of 5,000 receivers. Indirect manufacturing costs charged to each run are $90,000. Destination charges for each receiver average $2.00. Customer service expenses average $0.40 per receiver. The receivers are going to sell for $50 the first year and increase by $6 each year thereafter. Sales units equal production units each year.
-What are the Satellite Inc. life cycle budgeted costs?

Question

Quizplus · Accepted Answer

Development costs $60,000
Setup costs (2 × $20,000) × 3 120,000
Direct costs (2 × $80,000) × 3 480,000
Indirect manufacturing costs (2 × $90,000) × 3 540,000
Destination costs ($2.00 × 10,000) × 3 = 60,000
Customer service ($0.40 × 10,000) × 3 12,000
$1,272,000

Use the Information Below to Answer the Following Question(s)