Lazy Linda Kitchen Appliances has just begun the development of a new energy-saving, voice-activated toaster. The accountant, Linda Rest, is preparing a life cycle budget. Which of the following costs should be included?
i. The salaries of the designers dedicated to the design of the new toaster.
ii. The committed costs associated with the acquisition of a new machine that manufacturers the voice recognition component of the toaster.
iii. The cost of producing the new toasters.
iv. The costs associated with establishing a distribution network for the new product.
A) i, ii and iii
B) i, iii and iv
C) ii and iii
D) All of these costs should be included.

Question

Quizplus · Accepted Answer

All of the costs should be included in the life cycle budget as they are all pertinent to the development, production, and distribution of the new toaster. Salaries of designers are a part of the development phase, committed costs related to the acquisition of a new machine are a part of the production phase, production costs are essential to the production phase, and finally, distribution network costs are necessary for the distribution phase. Therefore, all should be included in the life cycle budget.

Lazy Linda Kitchen Appliances Has Just Begun the Development of a New