Bunch Manufacturing Is Considering Producing a New Product

question 96

Multiple Choice

Bunch Manufacturing is considering producing a new product.Bunch Manufacturing expects to sell 2,000 units over the product's expected 4-year life.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 cost over the product life cycle.

• A)$116,000
• B)$196,000
• C)$264,000
• D)$380,000

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Definitions:

Double Taxation

A taxation principle referring to income taxes paid twice on the same source of earned income; it can occur when income is taxed at both the corporate level and personal level.