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

Question 122

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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?


A) $424,000
B) $1,272,000
C) $639,000
D) $1,392,000
E) $298,000

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