Question :
Use the information below to answer the following question(s).
Satellite Inc. : 1185999
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.
16) What is the Satellite Inc. life cycle budgeted revenue?
A) $500,000
B) $560,000
C) $1,620,000
D) $1,680,000
E) $1,500,000
17) 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
18) What is the Satellite Inc. life cycle operating income?
A) $408,000
B) $76,000
C) $388,000
D) $348,000
E) $288,000
Use the information below to answer the following question(s).
N-C Associates is in the process of evaluating its new client services for the business consulting division. Estate Planning, a new service, incurred $600,000 in development costs and employee training. The direct costs of providing this service, which is all labour, averages $100 per hour. Other costs for this service are estimated at $2,000,000 per year. The current program for estate planning is expected to last for two years. At that time a new law will be in place which will require new operating guidelines for the tax consulting. Customer service expenses average $400 per client, with each job lasting an average of 400 hours. The current staff expects to bill 40,000 hours for each of the two years the program is in effect. Billing averages $140 per hour.
19) What is the N-C Associates’ life-cycle budgeted revenue?
A) $5,600,000
B) $8,000,000
C) $11,200,000
D) $22,400,000
E) $28,500,000
20) What is the N-C Associates’ life-cycle operating income (loss)?
A) $(1,480,000)
B) $(1,440,000)
C) $(2,080,000)
D) $11,200,000
E) $5,600,000
21) The life-cycle reporting process
A) is the same as traditional accounting reporting.
B) matches the company’s normal fiscal year reporting.
C) usually includes several accounting reporting periods.
D) tracks costs, but not revenues, from the beginning to the end of a product’s or service’s life.
E) is used only when yearly costs are not definable.
22) Which of the following is TRUE concerning Life cycle budgeting?
A) It obscures revenues in minor business functions.
B) It highlights only costs for the life cycle.
C) It has a calendar year focus.
D) It assumes that selling price is the same over the life cycle of the product.
E) It helps in setting prices to cover costs in all business functions.
23) Which of the following is not a benefit of life cycle reporting?
A) The full set of revenues associated with each product becomes visible.
B) The full set of costs associated with each product becomes visible.
C) The differences between products in the percentage of their total costs incurred at earl stages in the life cycle are highlighted.
D) Upstream costs, such as R & D, are the only costs that are need to be added in when a life cycle report is complete.
E) Interrelationships among business function cost categories are highlighted.
24) Which of the following is true of products with a long life cycle?
A) Their costs are more difficult to manage, early in their life cycle.
B) It is not as important to have accurate predictions of revenues.
C) They highlight the interrelationships with other parts of the life cycle.
D) They are highly visible and therefore must be carefully controlled.
E) A smaller fraction of the total life costs are actually incurred at the time when costs are locked-in.
25) Customer life-cycle costs
A) are the costs the selling company incurs to satisfy the customer.
B) are the costs to the customer of buying and using a product until it is replaced.
C) are the same as the selling life-cycle prices.
D) are the replacement costs of using a product or service.
E) focus on marketing costs.
