5. DataExclusive Ltd has been trading for a few years as a software company, developing high quality software products for industrial applications. Each product has an estimated life of two years. The company is worried about the erratic performance of their annual profits and has decided to investigate in detail, the profitability and cost structures of three of their products which have just completed their economic lives. The details are shown below: Package Inventory movement (IM) Distribution logistics (DL) Quality measurement (QM) Year 2 3,500 2,200 000 Year 1 25,000 1,800 000 6,500 750 1,400 150 500 Estimated demand (units) Selling price Costs Research & Product Design Production Marketing Distribution Customer call out and support Year 2 10,000 1,600 000 12 2800 2,600 600 1,250 Year 1 2,000 3,000 000 5,100 900 1,200 240 450 Year 2 3,000 3,000 000 100 1200 800 360 850 Year 1 4,000 2,500 000 2,400 1500 2,400 600 2,200 910 1400 1,700 360 3,080 For Product QM, in an effort to reduce costs, the research and product design was kept to a minimum. Required (a) Explain the purpose and usefulness of life cycle costing. (7marks) (b) Calculate the company's net income for Years 1 and 2 and briefly comment on the profit trend. (6 marks) (c) Calculate the product life cycle income statement for each software package. (6 marks) (d) Comment on the profitability and differences in cost structure of advise the company on strategies for improved profitability. three products and (6 marks)