AMA Q22 - Chapter 10

Question 1

What is LCC

Answer 1

Life-cycle costing

Question 2

What is the purpose of LCC?

Answer 2

To ensure that all costs of a product’s launch and development are covered in the total revenue by the end of the lifecycle

Question 3

Example of pre-launch costs in a product

Answer 3

• Design costs
• Prototyping
• Programming
• Process Design
• Equipment Acquisition

Question 4

Marking-up formula

Answer 4

Total costs + target profit = selling price

Question 5

Target Cost formula

Answer 5

highest selling price - target profit = target cost

Question 6

Cost gap

Answer 6

Any gap between a target cost and an expected cost

Question 7

Summarise Value Analysis

Answer 7

Analysing every aspect of a product/service to find which aspects can be reduced in cost/quality without affecting the value to the customer

Question 8

Summarise Value Engineering

Answer 8

It is the same as value analysis but done before a product is released instead

Question 9

Data Analytics definition

Answer 9

The process of collecting and examining data in order to extract meaningful business insights for operational and strategic decision-making