What is walsec inc life cycle operating income

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Reference no: EM132707486

Walsec Inc. is in the process of developing a smart wallet that has a radio-frequency identification (RFID) costing to protecting owners against identity theft. Starting in January 2021, the company expects to be able to produce and sell the new wallets for three years. At that point, the company will have incurred $75,000 in development costs. Production of the new wallet will involve two production runs each year, each requiring $25,000 per run in setup costs. Direct costs of producing the wallets are expected to be $100,000 per run and each run is expected to produce 6,250 wallets. Indirect manufacturing costs charged to each run are $120,000. The company expects to incur destination charges averaging $2.50 per wallet. Additionally, Walsec Inc. is expecting customer service expenses to average $0.50 per wallet. In the first year of sales, Walsec Inc. intends to sell each wallet for $60. In each subsequent year, the company expects to increase the selling price by $8 each year. As well, the company expects that sales units will equal production units each year.

Required:

Question (A) What is Walsec Inc.'s life cycle budgeted revenues?

Question (B) What is Walsec Inc.'s life cycle budgeted costs?

Question (C) What is Walsec Inc.'s life cycle operating income?

Question (D) In what ways does product-life-cycle reporting help managers improving a company's overall operations?

Reference no: EM132707486

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