Question 4 Kilo Plc are undertaking a review of its product portfolio and are considering re-designing...

  

 
 
 
 

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Question 4 Kilo Plc are undertaking a review of its product portfolio and are considering re-designing one of its most popular products, the Romeo, which has been very profitable but one of its competitors have launched a more advanced product which has seriously impacted sales of the Romeo. The company is planning to relaunch the Romeo and rebrand it under its new name, Juliet. The budgeted life cycle cost information for 2 years relating to Juliet is in Table 1- Life Cycle Costs for Juliet below: USE Life Cycle Costs for Juliet COSTS for Jullet below Table 1-Life Cycle Costs for Juliet Research, design and development Direct manufacturing costs Marketing and advertising Manufacturing fixed overheads Customer after sales service Distribution costs Disposal costs Total cost £000 900 450 650 325 475 65 Per unit cost £ 40 ALASTIDumon costs Disposal costs Additional information Budgeted production and sales: Year 1: 500,000 Year 2: 450,000 [Total 25 markel 475 65 O 6 points 4(a) Calculate the budgeted life cycle cost for Juliet. Present your answer appropriately and round figures to 2 decimal places. [6 marks] +23.6 0.1 D4 5 points 4(b) Briefly explain the five stages of the life cycle of a product/service. [5 marks] Question 4 Kilo Plc are undertaking a review of its product portfolio and are considering re-designing one of its most popular products, the Romeo, which has been very profitable but one of its competitors have launched a more advanced product which has seriously impacted sales of the Romeo. The company is planning to relaunch the Romeo and rebrand it under its new name, Juliet. The budgeted life cycle cost information for 2 years relating to Juliet is in Table 1- Life Cycle Costs for Juliet below: USE Life Cycle Costs for Juliet COSTS for Jullet below Table 1-Life Cycle Costs for Juliet Research, design and development Direct manufacturing costs Marketing and advertising Manufacturing fixed overheads Customer after sales service Distribution costs Disposal costs Total cost £000 900 450 650 325 475 65 Per unit cost £ 40 ALASTIDumon costs Disposal costs Additional information Budgeted production and sales: Year 1: 500,000 Year 2: 450,000 [Total 25 markel 475 65 O 6 points 4(a) Calculate the budgeted life cycle cost for Juliet. Present your answer appropriately and round figures to 2 decimal places. [6 marks] +23.6 0.1 D4 5 points 4(b) Briefly explain the five stages of the life cycle of a product/service. [5 marks]

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