lifecycle costing Test q 4

This topic has 3 replies, 3 voices, and was last updated 10 years ago by John Moffat.

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June 29, 2015 at 1:48 pm #259066
abdulnishad
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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 20000
June 29, 2015 at 5:40 pm #259082
John Moffat
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There 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 🙂
July 13, 2015 at 4:24 pm #260692
precious
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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.
July 14, 2015 at 8:28 am #260737
John Moffat
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But as I wrote above, if you change the question to read an annual demand of 4,000 (instead of 20,000) then the answer is correct.
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