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
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
Accounting (Text Only)
26th Edition
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter21: Cost Behavior And Cost-volume-profit Analysis
Section: Chapter Questions
Problem 21.26EX: Items on variable costing income statement In the following equations, based on the variable costing...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
100%
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...
(ClickRead 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.
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Revenues
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Variable costs:
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Months 9-14
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Months 15-26
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Months 27-32
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Total variable costs
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Fixed costs:
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Design costs
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Production
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Marketing
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Total fixed costs
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Life cycle operating income
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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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