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Features of product life cycle costing
Product life cycle costing is important due to the following features:
1) product life cycle costing involves tracing of costs and revenues of each product over several calendar periods throughout their entire life cycle. Costs and revenues can be analyzed by time periods but the emphasis is on costs and revenue accumulation over the entire life cycle for each product.
2) Product life cycle costing traces research and design and development costs etc. incurred to individual products over their entire life cycles so that the total magnitude of these costs for each individual product can be reported and compared with product revenues generated in later periods.
Life cycle costing thus ensures that costs for each individual product can be reported and compared with product revenue generated in the soon periods. As the costs are made more visible.
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