Teletronics is going to introduce a combination​ phone/tablet product. Design and testing will take 8 months. Teletronics expects to sell 24,000 units during the first 6 months of sales. Sales over the next 12 months are expected to be less robust at 20,000. ​And, sales in the final 6 months of the expected life cycle are expected to be 9,000. Teletronics is budgeting for this product as​ follows: LOADING... ​(Click the icon to view the cost​ information.)   Read the requirements LOADING... .   Requirement 1. If Teletronics prices the​ phone/tablets at $280 ​each, how much operating income will the company make over the​ product's life​ cycle? What is the operating income per​ unit?   Begin by preparing the life cycle income statement in order to determine how much operating income the company will make over the​ product's life cycle.   Projected Life Cycle Income Statement Revenues   Variable costs:   Months 9-14   Months 15-26   Months 27-32   Total variable costs   Fixed costs:   Design costs   Production   Marketing   Distribution     Total fixed costs   Life cycle operating income

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Teletronics
is going to introduce a combination​ phone/tablet product. Design and testing will take 8 months.
Teletronics
expects to sell
24,000
units during the first 6 months of sales. Sales over the next 12 months are expected to be less robust at
20,000.
​And, sales in the final 6 months of the expected life cycle are expected to be
9,000.
Teletronics
is budgeting for this product as​ follows:
LOADING...
​(Click
the icon to view the cost​ information.)
 
Read the
requirements
LOADING...
.
 
Requirement 1. If
Teletronics
prices the​ phone/tablets at
$280
​each, how much operating income will the company make over the​ product's life​ cycle? What is the operating income per​ unit?
 
Begin by preparing the life cycle income statement in order to determine how much operating income the company will make over the​ product's life cycle.
 
Projected Life Cycle Income Statement
Revenues
 
Variable costs:
 
Months 9-14
 
Months 15-26
 
Months 27-32
 
Total variable costs
 
Fixed costs:
 
Design costs
 
Production
 
Marketing
 
Distribution
 
 
Total fixed costs
 
Life cycle operating income
 
Data Table
- X Que:
onths
etrd
ron
Total Fixed Cost
for the Period
Variable cost
per Unit
Months
Type of Cost
Design costs
Production
Marketing
Distribution
Production
800,200
998,400
Months 0-8
Months 9-14
565 per unit
840,000
432,000
760,000
1,350,000
$5 per unit
S60 per unit
Months 15-26
Marketing
Distribution
Production
360,000
351,000
480,000
$5 per unit
$58 per unit
Months 27-32
Marketing
Distribution
162,000
$5 per unit
Ignore the time value of money.
Transcribed Image Text:Data Table - X Que: onths etrd ron Total Fixed Cost for the Period Variable cost per Unit Months Type of Cost Design costs Production Marketing Distribution Production 800,200 998,400 Months 0-8 Months 9-14 565 per unit 840,000 432,000 760,000 1,350,000 $5 per unit S60 per unit Months 15-26 Marketing Distribution Production 360,000 351,000 480,000 $5 per unit $58 per unit Months 27-32 Marketing Distribution 162,000 $5 per unit Ignore the time value of money.
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