Page 249 - F2 - MA Integrated Workbook STUDENT 2018-19

Alternative costing principles

There are a number of factors that need to be managed in order to maximise a
product’s return over its lifecycle:

Design costs out of the product: around 70% of a product costs are
often incurred at the design and development stage of a product’s
life.

Minimise the time to market: make a profit before competition
increases.

Maximise the length of the life cycle itself: the longer the life cycle,
the greater the profit that will be generated.

241