Question: Sydney Pty Ltd is considering launching a new product commencing in 2024 with a limited market life of three years. The accounting team has forecasted

Sydney Pty Ltd is considering launching a new product commencing in 2024 with a limited market life of three years. The accounting team has forecasted the following information under the traditional performance measurements as follows:

Sales revenue

Production costs

Selling costs

Distribution costs

2024

(S'000)

450

268

2025

(S'000)

475

261

2026

(S'000)

551

286

Subsequently, the following additional environmental costs have been identified as associated with this new product.

Waste filtration

Carbon dioxide exhaust extraction

Cleaning up the site

2024

(S000)

2025

(S000)

Required

1. Using the life cycle costing to calculate the product profit (excluding the environmental costs) over the three years. (5 marks)

2. Using the life cycle costing to calculate the product profit (including the environmental costs) over the three years. (5 marks)

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