The following statements have been made about life cycle costing: (1) Clean up costs should be included when assessing the profitability of a product (2) It is useful for organisations that develop products with a relatively short life Which of the above statements is/are correct?
A、1 only
B、2 only
C、Neither 1 nor 2
D、Both 1 and 2
A、1 only
B、2 only
C、Neither 1 nor 2
D、Both 1 and 2
【参考答案及解析】
Both statements are correct. Life cycle costing is the accumulation of costs of a product's entire life cycle. Products that are not expected to be profitable after allowing for clean up costs should not be considered. Life cycle costing can be very useful for organisations that continually develop products with a relatively short life, where it may be possible to estimate sales volumes and prices with reasonable accuracy.
Both statements are correct. Life cycle costing is the accumulation of costs of a product's entire life cycle. Products that are not expected to be profitable after allowing for clean up costs should not be considered. Life cycle costing can be very useful for organisations that continually develop products with a relatively short life, where it may be possible to estimate sales volumes and prices with reasonable accuracy.