Answer the Following Questions Using the Information Below

question 76

Multiple Choice

Answer the following questions using the information below:
Purple Purpose Inc., is in the process of evaluating a new product using the following information:
• A new transformer has two production runs each year, each with $10,000 in setup costs.
• The new transformer incurred $30,000 in development costs and is expected to be produced over the next three years.
• Direct costs of producing the transformers are $40,000 per run of 4,500 transformers each.
• Indirect manufacturing costs charged to each run are $45,000.
• Destination charges for each transformer average $1.00.
• Customer service expenses average $0.20 per transformer.
• The transformers are selling for $25 the first year and will increase by $3 each year thereafter.
• Sales units equal production units each year.
-What are estimated life-cycle revenues?

• A) $225,000
• B) $477,000
• C) $729,000
• D) $756,000

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Definitions:

Free Associations

A psychoanalytic technique where patients express their thoughts freely, allowing therapists to uncover unconscious desires or feelings.

Projections

The action of predicting or estimating something based on current trends or data.

Social Anxiety Disorder

A mental health condition characterized by intense fear and avoidance of social situations due to feelings of embarrassment, self-consciousness, and concern about being judged by others.

Agoraphobia

An anxiety disorder characterized by an intense fear of places or situations where escape might be difficult.