Question: A manager recently said: In the time during which we produced this product, we sold 50 000 units of it, bringing in total revenue of

A manager recently said: ‘In the time during which we produced this product, we sold 50 000 units of it, bringing in total revenue of R5 million. It cost us only R80 per unit to manufacture (which includes materials, labour and overheads), so we made a lot of money.’ What do you think of his statement from a life-cycle costing point of view?

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