Newton, Rivera and Associates are in the process of evaluating its new client services for the business consulting division.

Estate Planning, a new service, incurred $50,000 in development start-up costs and employee training.

The direct costs of providing this service, which is all labor, averages $27 per hour.

Other costs for this service are estimated at $300,000 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 that will require new operating guidelines for the tax consulting.

Customer service expenses average $95 per job, with each of the estimated 100 jobs 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 $42 per hour. Ignoring the time value of money, what is estimated life-cycle operating income for the first year?

Group of answer choices

A. $240,500

B. $1,320,500

C. 250,000

D. $1,330,000