Lavalier Company developed the following budgeted life-cycle income statement fo
ID: 2519362 • Letter: L
Question
Lavalier Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years.Product AA Product BB Total Sales $400,000 $350,000 $750,000 Cost of goods sold 300,000 200,000 500,000 Gross profit $100,000 $150,000 $250,000 Period expenses: Research and development (100,000) Marketing (75,000) Life-cycle income $75,000
A 12 percent return on sales is required for new products. Because the proposed products did not have a 12 percent return on sales, the products were going to be dropped.
Relative to Product BB, Product AA requires more research and development costs but fewer resources to market the product. Sixty-five percent of the research and development costs are traceable to Product AA, and 40 percent of the marketing costs are traceable to Product AA.
If research and development costs and marketing costs are traced to each product, life-cycle income for Product BB would be a. $150,000. b. $105,000. c. $90,000. d. $70,000. Lavalier Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years.
Product AA Product BB Total Sales $400,000 $350,000 $750,000 Cost of goods sold 300,000 200,000 500,000 Gross profit $100,000 $150,000 $250,000 Period expenses: Research and development (100,000) Marketing (75,000) Life-cycle income $75,000
A 12 percent return on sales is required for new products. Because the proposed products did not have a 12 percent return on sales, the products were going to be dropped.
Relative to Product BB, Product AA requires more research and development costs but fewer resources to market the product. Sixty-five percent of the research and development costs are traceable to Product AA, and 40 percent of the marketing costs are traceable to Product AA.
If research and development costs and marketing costs are traced to each product, life-cycle income for Product BB would be a. $150,000. b. $105,000. c. $90,000. d. $70,000. Lavalier Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years.
Product AA Product BB Total Sales $400,000 $350,000 $750,000 Cost of goods sold 300,000 200,000 500,000 Gross profit $100,000 $150,000 $250,000 Period expenses: Research and development (100,000) Marketing (75,000) Life-cycle income $75,000
A 12 percent return on sales is required for new products. Because the proposed products did not have a 12 percent return on sales, the products were going to be dropped.
Relative to Product BB, Product AA requires more research and development costs but fewer resources to market the product. Sixty-five percent of the research and development costs are traceable to Product AA, and 40 percent of the marketing costs are traceable to Product AA.
If research and development costs and marketing costs are traced to each product, life-cycle income for Product BB would be a. $150,000. b. $105,000. c. $90,000. d. $70,000. Lavalier Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years.
Product AA Product BB Total Sales $400,000 $350,000 $750,000 Cost of goods sold 300,000 200,000 500,000 Gross profit $100,000 $150,000 $250,000 Period expenses: Research and development (100,000) Marketing (75,000) Life-cycle income $75,000
A 12 percent return on sales is required for new products. Because the proposed products did not have a 12 percent return on sales, the products were going to be dropped.
Relative to Product BB, Product AA requires more research and development costs but fewer resources to market the product. Sixty-five percent of the research and development costs are traceable to Product AA, and 40 percent of the marketing costs are traceable to Product AA.
If research and development costs and marketing costs are traced to each product, life-cycle income for Product BB would be a. $150,000. b. $105,000. c. $90,000. d. $70,000. Lavalier Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years.
Product AA Product BB Total Sales $400,000 $350,000 $750,000 Cost of goods sold 300,000 200,000 500,000 Gross profit $100,000 $150,000 $250,000 Period expenses: Research and development (100,000) Marketing (75,000) Life-cycle income $75,000
A 12 percent return on sales is required for new products. Because the proposed products did not have a 12 percent return on sales, the products were going to be dropped.
Relative to Product BB, Product AA requires more research and development costs but fewer resources to market the product. Sixty-five percent of the research and development costs are traceable to Product AA, and 40 percent of the marketing costs are traceable to Product AA.
If research and development costs and marketing costs are traced to each product, life-cycle income for Product BB would be Product AA Product BB Total Sales $400,000 $350,000 $750,000 Cost of goods sold 300,000 200,000 500,000 Gross profit $100,000 $150,000 $250,000 Period expenses: Research and development (100,000) Marketing (75,000) Life-cycle income $75,000
Explanation / Answer
Life cycle income product income :
so answer is d) $70000
Product B Sales 350000 Cost of goods sold -200000 Gross profit 150000 Research and development cost -35000 Marketing cost (75000*60%) -45000 Net operating income 70000Related Questions
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