ACCA PM · Chapter 3 · Question 7 of 9
At which stage of a product's life are the majority of its life-cycle costs committed (locked in)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) The design and development stage
Explanation
Design decisions about materials, components and production methods commit most of the costs that will later be incurred, even though actual spending occurs mainly during production. This is why life-cycle costing and target costing emphasise managing costs at the design stage.
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