Satellite Inc. is in the process of evaluating its new products and has gathered the following information: 

The new product has two production runs each year, each with $40,000 in setup costs. 

The new product incurred $120,000 in development costs and is expected to be produced for three years. 

The direct costs of producing the new product are $90,000 per run of 10,000 units. 

Indirect manufacturing costs charged to each run are $180,000. 

Destination charges for each new product average $4.00 per unit. 

Customer service expenses average $0.80 per unit. 

The new products are going to sell for $75 the first year and increase by $5 each year thereafter. 

The company expects to sell all units that are produced. 

Required (A) What is the company's life cycle budgeted revenue (i.e., the total sales revenue the company will earn over the life of the product) for the new product? 

(B) What is the company's life cycle budgeted costs (i.e., the total costs the company will incur over the life of the product) for the new product? 

(C) What is the company's life cycle budgeted operating income for the new product? 

(D) Why would companies use life-cycle costing?