Question
A company wants to average $1,000,000 operating income /year from its new product line - the line is expected to have a market life of
A company wants to average $1,000,000 operating income /year from its new product line - the line is expected to have a market life of 4 years. HOW MANY UNITS DO THEY NEED TO SELL IN TOTAL OVER THE 4 YEARS TO REACH THIS $1,000,000 ANNUAL TARGET GIVEN THE FOLLOWING ? ...... Over the product's 4 year life, managers expect the unit selling price to average $90 per unit and its variable costs to average $48 per unit. Upfront R&D costs are expected to total $5,000,000, with average annual fixed costs relevant to the project to total $2,000,000 per year.
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
13th Edition
8120335643, 136126634, 978-0136126638
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