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Its mentioned that company is expecting to sell 20000 units per year over a period of 5 year…
in this case total cost should be divided by 100000 (20000*5). But why was the cost divided by only 20000There is an error – I do apologise.
Please change the annual demand to 4,000 per year. Then I think it is OK.
I am sorry – it will be corrected in the notes shortly.
However, the good thing is that the fact you spotted the error proves that you understand the topic 🙂
Sir,
For the same question as above (Life Cycle Test question 2)
I thought the total life cycle cost per unit is supposed to be divided by estimated total sales i.e(50,000+(100000*5)+10,000)= 560,000
560000/100,000=5.6.
Please correct me if I’m wrong.
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