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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
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 wl increase by $3 each year thereafter. Sales units equal production units each year. What is the estimated life -cycle operating income for the first year? O A. (2,600) B. 5,800 O c. ($5,800) D. 2,600
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