Review ViewHelp Question 3: (20 marks) The marketing department of Hercules Ltd. is planning to introduce a new product called H-5. The product details are as follows. Based on the market considerations, the target selling price per unit would be $800 The company's target profit margin on sales for all new products is 25% of sales. The initial estimate to manufacture one unit of H-5 includes: direct material $230; direct labour $125 and the manufacturing overhead to be applied at 80% of direct labour cost. The estimated upstream and downstream costs and the estimated sales of the proposed model H-5 are as follows: Year 2 Year 3 Year 4 Year 5 Year 1 Research and Development $3,960,000 Product and process design $1,560,000 Marketing Customer support Expected sales (units) $792,000 $888,000 $360,000 16,560 $600,000 $1,008,000 9,120 $504,000 $720,000 4,320 $312,000 Required: a. Prepare a Year 1 to Year 5 Life Cycle Budget for the H-5 model and use this budget to estimate the average unit cost. On this basis, would you recommend the development and introduction of the H-5 model? Explain. (16 marks) eferences Mailings Review View Help Www Www Customer support Espected sales (units) $360,000 16,560 $1,008,000 9,120 $720,000 4,320 $312,000 Required: a. Prepare a Year 1 to Year 5 Life Cycle Budget for the H-5 model and use this budget to estimate the average unit cost. On this basis, would you recommend the development and introduction of the H-5 model? Explain. (16 marks) Click or tap here to enter text. b. Briefly explain the ways in which the company could apply the principles of life cycle management to reduce the manufacturing cost of the H-5 model. (4 marks) Click or tap here to enter text