Question

for a new bottling machine it is developing. Future research and development expenses could range from $4 to $9 million, with a most likely value around $7 million. The life of the product will be anywhere from 3 to 10 years. Yearly unit sales will range from 100 to 500, with a most likely value around 300. The machines will sell for between $20,000 and $25,000 each. The production cost of the machine is expected to be

Answer 1

The production cost of the machine is expected to be 13,000

Step-by-step explanation:

Future research is developing a machine which can generate more sales. The The machine will incur research and development cost. This cost is not considered to be part of producing a machine because research expense is not capitalized. The development expense is capitalized if it meets certain conditions. The machine production cost will be around 13,000. The exact value for production can be lower or more. This is expected production cost of machine.