Life Cycle Costing (LCC) involves collecting cost data for each product from inception through its useful life and including any end cost. These data are compared with the life cycle
budgeted cost for the product. This comparison is important show if any savings may exist over the life of the product.
Life Cycle Costing will require the recognition of the total support required over the life of the product
whereas traditional costing focus on the function based support e.g. Research & Development, production, marketing and so on. Therefore for manufacturers LCC makes explicit the relationship between design choice and production and marketing costs.
The insights gained from company budgeted and actual life cycle costs may be used to refine future decisions. Consumers as well as producers may use LCC