1. GOVT. FIRST GRADE COLLEGE, MAGADI
AFFILIATED TO BANGALORE UNIVERSITY
DEPARTMENT OF COMMERCE
SUB : STRATEGIC COST MANAGEMENT
TOPIC: PROJECT LIFE CYCLE COSTING
PRESENTED TO:
CHANDRAKALA
PROF OF COMMERCE & MANAGEMENT
GOVT. FIRST GRADE COLLEGE, MAGADI, RAMANAGAR (DT.)
2. PROJECT LIFE CYCLE COSTING
Meaning
Definition
Categories of project life cycle
Optimization of project life cycle
4. Meaning
It is a technique which takes
account of the total cost owing a
physical asset or making a product
during its economic life.
PROJECT LIFE CYCLE COSTING
5. Definition
“It includes the cost associated with acquiring,
using, caring for and disposing of physical asset
including studies, research design, development,
production, maintenance, replacement and
disposed as well as support training and
operating cost generated by the acquisition,
use, maintenance and replacement of permanent
physical asset‘’
6.
7.
8. Categories of Project Life Cycle
1. Initial cost
2. Operating cost
3. Disposal costing
9. 1. Initial Cost
The cost which incurred initially for a
particular project .i.e. if asset is purchased by
a supplier then the following initial costs are :
ACQUISITION
INSTALLATION
COMMISSION
OBTAINING SPACE
10. Cont.,,
Recruitment and training of operation
Staff and maintenance Engineers
Purchase of ancillary maintenance
equipments
11. 2. Operating cost
The operating cost for an item of capital
equipment includes not just operator cost and also
maintenance cost to support services such as :
Material handling
Quality control
Continued training recruitment for new staff and so
on.
12. 3. Disposal costing
Disposal costing is a significant
for a fixed asset because the asset must
be demolished and removed and the
site made good for other use . These
cost may be upset by the disposal value
of the asset.
13. Optimization of project life cycle cost
Optimization of project life cycle
cost nothing but optimization of costs,
situation, opportunity or resources. It is for
we manage our times so that we optimize
our productivity. This is through the
following stages.