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Please could you explain to me in detail what life cycle costing is. I do not remember covering this in lower papers either.
Also if you could recommed a question based on this topic from BPP revision kit, I would much appreciate it.Many thanks
All costs relating to a product are taken into account: research, development, production and after-life costs (such as correcting environmental damage). Ultimately revenues should exceed total costs.
I have no access to BPP revision kits.
Thnak you so much gromit, so how can this be asked in the exam if it is as simple as that!? Am I making it more difficult than simply costs as explained?
Hello,
I have a question in relation with Life Cycle costing. I hope you could clarify something. The question is 13.3 BBP Revision Kit>
Which of the following statements descibes life cycle costing?
I am not sure about the following two options>
B. the profiling of cost over a product’s development, prodcution life and dismantling period.
C. the profiling of cost and revenues over a prodcut’s developement, prodcution life and dismantling period.I would say that option C is the correct one, but in the book it seems that the correct answer is B (they say that life cycle costing looks at cost only but over the prodcut’s life cycle)
And my question is… what about revenues? the definition of life cycle costing in the BPP book says that it tracks and accumulates the costs and revenues attributable to the product over the full life cycle, which may last for many years.
Could you please help me with this?
Thank you very much in advanceIt’s called life cycle costing so is dealing with costs. The danger was that under
conventional costing development and dismantling costs were not matched to the product to see if overall a profit was made.Revenues would almost certainly been taken over the products life as they would occur during the production stage.
Many thanks for your answer gromit. I understand the diffetrence between life cycle costing and tradictional costing. But I still do not understand then why in the definition of life cycle costing they mention that life cycle costing tracks and acummulates costs and revenues attrubutable to the entire product’s life. They mention costs and revenues not, just costs.
Thanks in advance,
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