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

question 105

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 is the Satellite Inc.life cycle operating income?

• A)$408,000
• B)$76,000
• C)$388,000
• D)$348,000
• E)$288,000

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Definitions:

Strategic Change

The process of implementing significant adjustments in an organization's direction, operations, or capabilities to respond to internal or external opportunities and challenges.

Grassroots Change

A type of change initiated and driven by community members or lower-level employees, rather than top leadership.

Organic Structures

Refers to an organizational form that is flat, uses low levels of formalization, operates with decentralized decision-making, and encourages high levels of collaboration among employees.

Highly Formalized

Refers to a structure or system with explicit rules, procedures, and standards that are strictly followed.