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Forums › ACCA Forums › ACCA PM Performance Management Forums › Life cycle costing Stages
Hello , Good afternoon .
According to the lifecycle costing method , which two of the following statements regarding the stages of life cycle are true ?
a) At the introduction stage , further capital expenditure will be needed as production capacity will need to increase to meet demand .
b) The maturity stage occurs when the market has reached ‘ saturation point ‘ and bought enough of the product .
c) The majority of a product’s life cycle costs are determined by decisions which are made at the design and development stage .
d) The growth stage , when sales will have reached their peak and become stable , will be the most profitable stage .
The answer was given as a) and c) . Pls explain how ‘a ‘ is true and ‘b’ is false . I thought Further capex will be incurred in the growth stage and initial investment in the introductory stage .
Please clarify : )
Thank you !
For b) being false I would suggest “saturation point”is more indicative of the decline stage.
Ok , Thank you : )
You are welcome.
