Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 37

Explain the difference in intended application between strategic pricing and life-cycle costing.

Step 1 of 2

“The strategic pricing depends on the product’s price which it supported the worth it charges to the customer. It is not dependent on the cost of production of the product.

So by strategic pricing it creates the foremost valuable product for the customer and determines the customer value which may become the shareholders’ value in the future.”

“The life cycle costing is measured as a system which is used within the business to trace the particular expenses and revenues which are incurred for any cost which has been incurred. This identification of the cost object is generally gathered from its introduction to the decline stage.

It also traces the expenses and revenue which are due to products over the amount or stages within the cycle.”