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Exercises on Life Cycle Costing XYZ Corporation GCorporation had the dhaice to develop either CELL PHONE 101 or CELL PHONE 999, both cell phones have the same fundionality. CELL PHONE 101 is designated for a broad range of applications and is robustly implemented. CELL PHONE 999's design and implementation is "rough and ready" meaning the basic fundionality is made available quickly and extra resoures are spent in marketing and customizing the product for specialized customer segments. The budgeted amounts for CELL PHONE 101 and CELL PHONE 999 over a s-year product life cyde are: CELL PHONE 101 CELL PHONE 999 Years 1 & 2 R&D Design Costs 240,000.00 160,000.00 150,000.00 75,000.00 Years 3 to 6 Variable Costs Per Package 25.00 Variable Costs Total Fixed Costs 100,000.00 Total Fixed Costs 100,000.00 Per Package 25.00 Production Costs Marketing Costs 70,000.00 50, 000.00 24.00 90,000.00 80,000.00 40.00 25.00 Distribuion 16.00 Costs Gustomer 80, 000.00 30.00 100,000.00 50.00 Service Costs Requirements: Suppose that at a selling price of P 480, XYZ Coparation marketing eam forecasts total life cycle sales of 4000 units for either CELL PHONE 101 or CELL PHONE 999. (Ignaring the time-value of maney) 1. Compute for the total life cycle costs and life cycle operating income for each of the options 2. Which product would you recommend for adopion? 3. Suppose that at a selling price of P 480, XYZ Corparation marketing team forecasts total life-cycle sales of 4,000 unts for either CELL PHONE 101 or CELL PHONE 999. Ignaring the time value of money, what would the predicted total ife-cycle costs and ife-cycle operating income be for CEL PHONE 101 and Cell Phone 999? Which produd should XYZ Corparation choose? Explain.

Exercises on Life Cycle Costing XYZ Corporation GCorporation had the dhaice to develop either CELL PHONE 101 or CELL PHONE 999, both cell phones have the same fundionality. CELL PHONE 101 is designated for a broad range of applications and is robustly implemented. CELL PHONE 999's design and implementation is "rough and ready" meaning the basic fundionality is made available quickly and extra resoures are spent in marketing and customizing the product for specialized customer segments. The budgeted amounts for CELL PHONE 101 and CELL PHONE 999 over a s-year product life cyde are: CELL PHONE 101 CELL PHONE 999 Years 1 & 2 R&D Design Costs 240,000.00 160,000.00 150,000.00 75,000.00 Years 3 to 6 Variable Costs Per Package 25.00 Variable Costs Total Fixed Costs 100,000.00 Total Fixed Costs 100,000.00 Per Package 25.00 Production Costs Marketing Costs 70,000.00 50, 000.00 24.00 90,000.00 80,000.00 40.00 25.00 Distribuion 16.00 Costs Gustomer 80, 000.00 30.00 100,000.00 50.00 Service Costs Requirements: Suppose that at a selling price of P 480, XYZ Coparation marketing eam forecasts total life cycle sales of 4000 units for either CELL PHONE 101 or CELL PHONE 999. (Ignaring the time-value of maney) 1. Compute for the total life cycle costs and life cycle operating income for each of the options 2. Which product would you recommend for adopion? 3. Suppose that at a selling price of P 480, XYZ Corparation marketing team forecasts total life-cycle sales of 4,000 unts for either CELL PHONE 101 or CELL PHONE 999. Ignaring the time value of money, what would the predicted total ife-cycle costs and ife-cycle operating income be for CEL PHONE 101 and Cell Phone 999? Which produd should XYZ Corparation choose? Explain.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Exercises on Life Cycle Costing XYZ Corporation GCorporation had the dhaice to develop either CELL PHONE 101 or CELL PHONE 999, both cell phones have the same fundionality. CELL PHONE 101 is designated for a broad range of applications and is robustly implemented. CELL PHONE 999's design and implementation is "rough and ready" meaning the basic fundionality is made available quickly and extra resouræs are spent in marketing and customizing the product for specialized customer segments. The budgeted amounts for CELL PHONE 101 and CELL PHONE 999 over a s-year product life cyde are: CELL PHONE 101 CELL PHONE 999 Years 1 & 2 R&D Design Costs 240,000.00 160,000.00 150,000.00 75,000.00 Variable Costs Per Package 25.00 Variable Costs Per Package 25.00 Years 3 to 6 Total Fixed Costs Total Fixed Costs 100,000.00 Production Costs Marketing Costs 100,000.00 70,000.00 50, 000.00 24.00 90,000.00 80,000.00 40.00 25.00 Distribuion 16.00 Costs Gustomer 100,000.00 80,000.00 30.00 50.00 Service Costs Requirements: Suppose that at a selling price of P 480, XYZ Coparation marketing eam forecasts total life cycle sales of 4000 units for either CELL PHONE 101 or CELL PHONE 999. (Ignaring the time-value of maney) 1. Compute for the total life cycle costs and life cycle operating income for each of the options 2. Which product would you recommend for adopion? 3. Suppose that at a selling price of P 480, XYZ Corparation marketing team forecasts total life-cycle sales of 4,000 units for either CELL PHONE 101 or CELL PHONE 999. Ignaring the time value of money, what would the predicted total ife-cycle costs and ife-cycle operating income be for CEL PHONE 101 and Cell Phone 999? Which produd should XYZ Corparation choose? Explain. 4. How do CELL PHONE 101 and CELL PHONE 999 differ in their cost strudures (he percentage of total costs in each cost category)? Which produd would XYZ Corporation view as mare risky? Bplain.
Transcribed Image Text:Exercises on Life Cycle Costing XYZ Corporation GCorporation had the dhaice to develop either CELL PHONE 101 or CELL PHONE 999, both cell phones have the same fundionality. CELL PHONE 101 is designated for a broad range of applications and is robustly implemented. CELL PHONE 999's design and implementation is "rough and ready" meaning the basic fundionality is made available quickly and extra resouræs are spent in marketing and customizing the product for specialized customer segments. The budgeted amounts for CELL PHONE 101 and CELL PHONE 999 over a s-year product life cyde are: CELL PHONE 101 CELL PHONE 999 Years 1 & 2 R&D Design Costs 240,000.00 160,000.00 150,000.00 75,000.00 Variable Costs Per Package 25.00 Variable Costs Per Package 25.00 Years 3 to 6 Total Fixed Costs Total Fixed Costs 100,000.00 Production Costs Marketing Costs 100,000.00 70,000.00 50, 000.00 24.00 90,000.00 80,000.00 40.00 25.00 Distribuion 16.00 Costs Gustomer 100,000.00 80,000.00 30.00 50.00 Service Costs Requirements: Suppose that at a selling price of P 480, XYZ Coparation marketing eam forecasts total life cycle sales of 4000 units for either CELL PHONE 101 or CELL PHONE 999. (Ignaring the time-value of maney) 1. Compute for the total life cycle costs and life cycle operating income for each of the options 2. Which product would you recommend for adopion? 3. Suppose that at a selling price of P 480, XYZ Corparation marketing team forecasts total life-cycle sales of 4,000 units for either CELL PHONE 101 or CELL PHONE 999. Ignaring the time value of money, what would the predicted total ife-cycle costs and ife-cycle operating income be for CEL PHONE 101 and Cell Phone 999? Which produd should XYZ Corparation choose? Explain. 4. How do CELL PHONE 101 and CELL PHONE 999 differ in their cost strudures (he percentage of total costs in each cost category)? Which produd would XYZ Corporation view as mare risky? Bplain.
5. Jose Carpio is division manager for financial and accounting products at XYZ Corporation. The Cell Phone is one of her divisians products. 1 Jose Carpid e evaluation and bonus are liriked to division operating income and she unlikely to be at XYZ Corporation beyand years 1 and 2, which product (CELL PHONE 101 or CELL PHONE 999) is she likely to endorse?
Transcribed Image Text:5. Jose Carpio is division manager for financial and accounting products at XYZ Corporation. The Cell Phone is one of her divisians products. 1 Jose Carpid e evaluation and bonus are liriked to division operating income and she unlikely to be at XYZ Corporation beyand years 1 and 2, which product (CELL PHONE 101 or CELL PHONE 999) is she likely to endorse?
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