Fanshawe 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 are the Fanshawe Inc. life cycle budgeted costs?

Question 7Select one:

a.

$424,000

b.

$1,272,000

c.

$298,000

d.

$639,000

e.

$1,392,000