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


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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