The Algonquin Company developed the following budgeted life-cycle income statement for two proposed products. Each product's...

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The Algonquin Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years. Sales Cost of goods sold Gross profit Period expenses: Research and development Marketing Life-cycle income Product A Product B Total $280,000 200,000 $200,000 130,000 $480,000 330,000 $ 80,000 $ 70,000 $150,000 (70,000) (50,000) $ 30,000 A 10 percent return on sales is required for new products. Because the proposed products did not have a 10 percent return on sales, the products were going to be dropped. Relative to Product B, Product A requires more research and development costs but fewer resources to market the product. Sixty percent of the research and development costs a traceable to Product A, and 30 percent of the marketing costs are traceable to Product A. If research and development costs and marketing costs are traced to each product, life-cycle income for Product A would be Oa. $27,000. Ob. $23,000. Oc. $38,000. Od. $15,000 The Algonquin Company developed the following budgeted life-cycle income statement for two proposed products. Each product's life cycle is expected to be two years. Sales Cost of goods sold Gross profit Period expenses: Research and development Marketing Life-cycle income Product A Product B Total $280,000 200,000 $200,000 130,000 $480,000 330,000 $ 80,000 $ 70,000 $150,000 (70,000) (50,000) $ 30,000 A 10 percent return on sales is required for new products. Because the proposed products did not have a 10 percent return on sales, the products were going to be dropped. Relative to Product B, Product A requires more research and development costs but fewer resources to market the product. Sixty percent of the research and development costs a traceable to Product A, and 30 percent of the marketing costs are traceable to Product A. If research and development costs and marketing costs are traced to each product, life-cycle income for Product A would be Oa. $27,000. Ob. $23,000. Oc. $38,000. Od. $15,000

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