Mercy greeting cards incorporated is starting a new

Reference no: EM13603885

Mercy Greeting Cards Incorporated is starting a new business venture and are in the process of evaluating its product lines. Information for one new product, traditional parchment grade cards, is as follows: ? Sixteen times each year, a new card design will be put into production. Each new design will require $100 in setup costs. ? The parchment grade card product line incurred $75,000 in development costs and is expected to be produced over the next four years. ? Direct costs of producing the designs average $0.50 each. ? Indirect manufacturing costs are estimated at $50,000 per year. ? Customer service expenses average $0.10 per card. Current sales are expected to be 2,500 units of each card design. Each card sells for $3.50. ? Sales units equal production units each year. What is the total estimated life-cycle operating income?

Reference no: EM13603885

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