Life cycle costing is incompatible with activity-based costing.

Question

Quizplus · Accepted Answer

Life cycle costing and activity-based costing can be complementary. Life cycle costing evaluates the total cost of ownership of a product over its entire life, including pre-production, production, and post-production stages. Activity-based costing allocates costs to specific activities, providing detailed insight into where and how costs are incurred throughout a product's life cycle. Together, they can offer a comprehensive view of costs, enhancing decision-making and cost management.

Life Cycle Costing Is Incompatible with Activity-Based Costing