- This topic has 4 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
Unit costs begin to fall as economies of scale become possible in growth stage.. what do you mean by unit costs
Also is lifecycle costing like an internal tool ? or is it actually used instead of say target costing or abc costing
Unit costs are the costs of producing one unit.
I don’t know what you mean by an ‘internal tool’. Target costing, ABC, and lifecycle costing are all methods by which the business might determine the cost (and from that the selling price to charge). In that sense they are all internal.
The more units they make, it is likely that the lower the cost per unit will be. It is because of, for example, getting discounts from suppliers because you are buying more materials; workers getting better and therefore faster and therefore labour cost per unit being lower; and fixed costs absorbed per unit will be lower if they are producing more.
- You must be logged in to reply to this topic.