Sue Company Is Considering the Production of a New Product

Multiple Choice

Sue Company is considering the production of a new product.Sue Company has the following data available:
$\begin{array}{ll}\text { Expected product life } & 4 \text { years } \\\text { Expected sales (units) over product life } & 2,000 \\\text { Variable production costs } & \$ 42 \text { per unit } \\\text { Variable selling costs } & \$ 16 \text { per unit } \\\text { Annual fixed production costs } & \$ 15,000 \\\text { Annual fixed selling costs } & \$ 5,000 \\\text { Research and development costs } & \$ 184,000 \\\text { Selling price } & \$ 200 \text { per unit }\end{array}$
What is the expected profit or (loss) of the product over the product life cycle?

A) $(40,000)
B) $20,000
C) $204,000
D) $880,000