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

question 6

Multiple Choice

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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Definitions:

Market Economies

Market economies are economic systems in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country's citizens and businesses with minimal government intervention.

Adjustment

The process of modifying something to achieve a desired outcome, often used in the context of economic policies, mechanisms, or personal changes.

Equilibrium Price

The price at which the quantity of a product offered is equal to the quantity of the product in demand.

Government

The organization, or system of governance, that exercises authority and performs the functions of governing a political state or community.