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Costing techniques
Life-cycle costing
Life-cycle costing is the accumulation of costs for activities that occur
over the entire life of a product, from inception to abandonment.
Design costs out of the product: between 80% and 90% 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.
Illustrations and further practice
Now attempt example 3 'Lifecycle costing' from Chapter 3.
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