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Describe the nature or characteristics of product life cycle costing? (Part 2 of 4)

January 25th, 2010 / No comments yet

CHARACTERISICS OF PRODUCT LIFE CYCLE COSTING

The main characteristics of product life cycle costing comprises:

  • tracing of costs and revenues of each product over the several calendar periods throughout their entire life cycle
  • traces research and design and development costs and total magnitude of these costs for each individual product and compared with product revenue
  • report generation for costs and revenues.

What Is Product Life Cycle Costing ? (Part 1 of 4)

January 25th, 2010 / 1 comment

WHAT IS PRODUCT LIFE CYCLE COSTING?

Product life cycle costing is a costing methodology or approach enabling the user to understand a long term picture of the life of a product in terms of:

  • profitability;
  • feedback on the effectiveness of life cycle planning and
  • cost data to clarify the economic impact of alternatives chosen in the design, engineering phase,etc.

Cost accountants view this methodology as a way to enhance control of the manufacturing costs at each stage of a product life’s cycle. It enables better visibility of the costs for each individual product and to compare the product revenue generated in later period.

 

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