Which of the Following Is a Benefit of Life Cycle

question 2

Multiple Choice

Which of the following is a benefit of life cycle costing over target costing?

• A) Life cycle costing is less likely to reject a product due to high up-front costs because it considers changes in price and costs over its entire life cycle
• B) Life cycle costing is less expensive to administer than target costing
• C) Products appear cheaper under life cycle costing because it does not consider research and development since this cost occurs prior to production
• D) Life cycle costing focuses only on costs in the product's life cycle; thus eliminating defect and warranty costs often associated with products

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Definitions:

Cartels

An agreement among competing firms to control prices or exclude entry of a new competitor in a market, often to maximize profits collectively.

Secret Price Concessions

Secret price concessions involve undisclosed discounts or benefits offered by a seller to a buyer, often to secure a deal or foster loyalty without publicly affecting the listed price.

Business-Cycle Stability

The condition of an economy experiencing minimal fluctuations in growth, unemployment, and inflation, resulting in a stable economic environment.

Participating Firms

Companies that engage in a particular market or economic activity, contributing to the production, distribution, or provision of goods and services.