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Home Q & A Board Other Fields Homework Help Business Economics
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pduvin pduvin
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6 years ago
Max and Marv are starting a new business venture and are in the process of evaluating their product lines. One new product, hand-made wooden tables, has incurred $30,000 in development costs. These costs are to be amortized over a three-year period, the expected product life cycle. The direct costs of each table averages $90. Other costs for making the tables are estimated at $100,000 per year. The current sales program for tables is expected to change every six months. At that time a new pattern will be put in place with $7,000 of setup costs. Each table requires 12 labour hours and 2 machine hours. Current annual sales are expected to be 2,000 units of each table at $140 each. Customer service expenses average $10 per table.

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What is the life-cycle operating income?
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Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
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AllopaAllopa
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pduvin Author
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6 years ago
Good timing, thanks!
vanna2014
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Yesterday
You make an excellent tutor!
Holly72492
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2 hours ago
this is exactly what I needed
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