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Life’cycle stages

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Life’cycle stages

  • This topic has 1 reply, 2 voices, and was last updated 9 months ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • October 28, 2021 at 10:28 am #639304
    John1998m
    • Topics: 62
    • Replies: 36
    • ☆☆

    In Lifecycle costing, I have problem with Demand, Sales revenue and Profit at each stage.

    1) Development stage:
    Demand would be 0
    Sales revenue would be 0
    Loss is at max at this stage

    2) Introduction stage:
    Demand increases slowly
    so does sales revenue started to increase slowly
    Loss would be 0 at this stage

    3) Growth stage:
    Demand increases rapidly
    so does sales revenue started to increase rapidly
    so does profit started to increase rapidly

    4) Maturity stage:
    Demand is at max
    so does sales revenue is at max
    so does profit is at max

    5) Decline stage:
    Demand started to decline
    so does sales revenue start to decline
    so does profit start to decline

    October 28, 2021 at 3:07 pm #639317
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49927
    • ☆☆☆☆☆

    What you have written is correct, except that you cannot possibly say that the loss will be zero during the introduction phase. The loss is likely to reduce is all you can say.

    Have you not watched my free lectures on this or looked at the illustrative graph in our free lecture notes?

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