Bhimani, Horngren,
Datar and Rajan,
Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012
Life-cycle costing can be implemented fairly and easily by coding revenue and expense journal entries byproduct as well as by functional account (e.g. RD and advertising. Data can then easily be compiled for each product. At the
beginning of the life cycle, it is difficult to determine how successful a product will be. Hence, the earlier in a product’s life-cycle costs are locked in (i.e. before there is much information on the probability that the product will succeed, the riskier the product.
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