Vanilla Manufacturing is considering producing a new product. Vanilla Manufacturing expects that it will sell 12,000 units over the life of the product. Variable production costs and variable selling costs are estimated at $42 and $16 per unit, respectively. Annual fixed production and fixed selling costs are estimated at $15,000 and $5,000, respectively. Research and development costs are estimated at $184,000. _ is the total variable cost over the product life cycle.

Question

Quizplus · Accepted Answer

The total variable cost over the product life cycle is calculated by adding the variable production costs and variable selling costs per unit, then multiplying by the total number of units. ($42 + $16) * 12,000 = $696,000.

Vanilla Manufacturing Is Considering Producing a New Product