Acct434 Advanced Cost Management: 3. (TCO 7) Grace Greeting Cards Incorporated is starting

Acct434 Advanced Cost Management 3. (TCO 7) Grace Greeting Cards Incorporated is starting a new business venture and is in the process of evaluating its product lines. Information for one new product, traditional parchment grade cards, is as follows: - For 16 times each year, a new card design will be put into production. Each new design will require $200 in setup costs. - The parchment grade card product line incurred $75,000 in development costs and is expected to be produced over the next four years. - Direct costs of producing the designs average $0.50 each. - Indirect manufacturing costs are estimated at $50,000 per year. - Customer service expenses average $0.10 per card. - Sales are expected to be 2,500 units of each card design. Each card sells for $3.50. - Sales units equal production units each year. What is the total estimated life-cycle operating income? (Points : 25)