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Sberry Dec 18 exam kit

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › Sberry Dec 18 exam kit

  • This topic has 1 reply, 2 voices, and was last updated 2 years ago by Ken Garrett.
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  • August 9, 2022 at 8:07 am #662740
    rammeyy
    Member
    • Topics: 15
    • Replies: 18
    • ☆

    Hi ken, i m just confused about this sentence in Sberry D18 exam question-“It aims to keep each product in production for at least 18 months so that it
    can recover the high cost of product development”.
    What does it actually mean?

    Thanks

    August 10, 2022 at 1:20 pm #662834
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10591
    • ☆☆☆☆☆

    Production development will usually include items such as research and development and the production of items such as moulds which are needed for the new product. These costs are paid up front and often are large. The company hopes that sales of the product will even ally recoup the costs, but the more of the product made and sold, the greater the chance of initial cost recovery (and also the lower development cost per unit will be).

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