Appletree, Inc., is analyzing the profitability and pricing policies for two of its accounting software packages....
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Appletree, Inc., is analyzing the profitability and pricing policies for two of its accounting software packages. Summary data on the packages over their two-year product life cycle are as follows: Package Quick Tax............. Fast Audit. Revenue.. Costs: Selling Price $ 250 $ 200 Required: 1. 2. R&D. Product Design... Manufacturing.. Marketing.. Distribution. Customer Service.. The following life-cycle revenue and cost information is available (in thousands): Year 1 Sales in Units Year 1: Year 2: Quick Tax 1,400 370 150 280 Year 1: Year 2: 30 100 Year 2 $1,000 $4,000 4,000 16,000 30 450 720 120 650 10,000 6,000 Fast Audit Year 2 Year 1 $2,000 $1,200 480 160 286 480 120 440 Appletree is particularly concerned with increases in R&D and product design costs for many of its software packages in recent years. Con- sequently, major efforts have been made to reduce these costs on the Fast Audit package. 32 130 416 72 776 Prepare a product life-cycle income statement for each software package. Compare the two packages in terms of their profitability and cost structure. State your conclusions. Appletree, Inc., is analyzing the profitability and pricing policies for two of its accounting software packages. Summary data on the packages over their two-year product life cycle are as follows: Package Quick Tax............. Fast Audit. Revenue.. Costs: Selling Price $ 250 $ 200 Required: 1. 2. R&D. Product Design... Manufacturing.. Marketing.. Distribution. Customer Service.. The following life-cycle revenue and cost information is available (in thousands): Year 1 Sales in Units Year 1: Year 2: Quick Tax 1,400 370 150 280 Year 1: Year 2: 30 100 Year 2 $1,000 $4,000 4,000 16,000 30 450 720 120 650 10,000 6,000 Fast Audit Year 2 Year 1 $2,000 $1,200 480 160 286 480 120 440 Appletree is particularly concerned with increases in R&D and product design costs for many of its software packages in recent years. Con- sequently, major efforts have been made to reduce these costs on the Fast Audit package. 32 130 416 72 776 Prepare a product life-cycle income statement for each software package. Compare the two packages in terms of their profitability and cost structure. State your conclusions.
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2 a Prepare a product lifecycle income statement for each software ... View the full answer
Related Book For
Management And Cost Accounting
ISBN: 9781292232669
7th Edition
Authors: Alnoor Bhimani, Srikant M. Datar, Charles T. Horngren, Madhav V. Rajan
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