Reference no: EM132558421

Stone and Bicker are starting a new business venture and are in the process of evaluating product lines . Information for one new , hand -made lamps , is as follows - Every six months a new lamp pattern will be put into production . Each new pattern will 200 in costs lamp product line incurred $ 48,000 in development costs and is expected to be produced over the next six years . Direct costs of producing the lamps average $144 each . Each lamp requires labour and 2 machine hours Indirect manufacturing costs are estimated at $160,000 per year . - Customer service expenses average $ 16 per lamp - sales are expected to be 2, 000 units of each lamp pattern . Each lamp 224 Sales units equal production units each year .

Required:

Question a What are the estimated life -cycle revenues ( Hint: the total years the product be sold)

Question b What is the estimated life -cycle operating income if the product life is one year