Answer (D) is correct . Whole-life costs include after-purchase costs (operating, support, repair, and disposal) incurred by customers as well as life-cycle costs (R&D, design, manufacturing, marketing, distribution, and research). Hence, the budgeted unit whole-life cost is $36 [($2,000,000 + $3,000,000 + $1,200,000 + $1,000,000) ¡Â 200,000 units], and the budgeted unit selling price is $45 ($36 ¡Á 125%).Answer (A) is incorrect because This amount is the budgeted unit manufacturing cost. Answer (B) is incorrect because This amount is the budgeted unit life-cycle cost. Answer (C) is incorrect because This amount is the budgeted unit whole-life cost.
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