Delaware Carnival Inc. will be offering a new ride in its amusement park. It has identified thefollowing sales and costs from its introduction phase to the growth stages.Year 0Year 1Year 2ТОTALTickets to be sold72,000240,000312,000Price per unitP200200P200COSTSResearch and DevelopmentP 8,000,00024,000,000P 8,000,00024,000,000Ride designing and prototypingRide equipment manufacturing10,000,00010,000,000and safety trial runsMarketingP 8,000,0003,000,000P 4,000,0002,000,0008,000,00020,000,000Repairs and maintenanceUtilities4,000,0009,000,000360,0001,200,0001,560,000Customer Support1,440,0004,800,0006,240,000Cost of printing tickets360,0001,200,0001,560,000Incremental Administrative500,000500,000500,0001,500,000P 54,500,000 P 13,660,000 P 13,700,000 P 81,860,000Its maturity stage will span a period of three years where the entity will be forced to lower itsTOTAL COSTSprices to P180 per ticket to maintain annual sales of 300,000. Its decline stage will provide sales ofP18,000,000 (100,000 tickets x P180) and total costs of P15,000,000.If the target life cycle profit margin is 25%, how much is the total maximum cost that Delaware canincur over the three-year maturity phase?

A product has four stages of life in life cycle costing. 1. Introduction 2. Growth 3. Maturity 4.…

Delaware Carnival Inc. will be offering a new ride in its amusement park. It has ident following sales and costs from its introduction phase to the growth stages. Year 0 Year 1 Year 2 Tickets to be sold Price per unit 72,000 240,000 P 200 P 200 COSTS Research and Development Ride designing and prototyping Ride equipment manufacturing and safety trial runs P 8,000,000 24,000,000 10,000,000 P 8,000,000 3,000,000 P 4,000,000 2,000,000 Marketing 8,000,000 Repairs and maintenance 4,000,000

Delaware Carnival Inc. will be offering a new ride in its amusement park. It has ident following sales and costs from its introduction phase to the growth stages. Year 0 Year 1 Year 2 Tickets to be sold Price per unit 72,000 240,000 P 200 P 200 COSTS Research and Development Ride designing and prototyping Ride equipment manufacturing and safety trial runs P 8,000,000 24,000,000 10,000,000 P 8,000,000 3,000,000 P 4,000,000 2,000,000 Marketing 8,000,000 Repairs and maintenance 4,000,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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