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Life cycle costing

Forums › Ask CIMA Tutor Forums › Ask CIMA P2 Tutor Forums › Life cycle costing

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by Cath.
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  • March 10, 2017 at 5:16 am #377286
    aryansaxrna87
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    Sir
    Can you tell me the formula for life cycle costing

    March 10, 2017 at 12:40 pm #377373
    Cath
    Participant
    • Topics: 0
    • Replies: 448
    • ☆☆☆

    Hi – the formula for lifecycle costing is one of the simpler ones of this paper.

    You take total costs from all stages of the product life (eg research and design costs, production costs, marketing costs and future disposal costs) and divide this total by the number of units that you will produce during the whole life of the product.

    This will give you lifecycle cost per unit.

    To summarise:

    Lifecycle cost per unit = Total costs [All costs incurred during life of product] / Total number of units produced during life time]

    Many Thanks
    Cath

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