Life cycle costing is a concept which traces all costs to a product over its complete lifecycle, from design through to cessation. It recognises that for many products there are significant costs to be incurred in the early stages of its lifecycle. This is probably very true for Oria Software Inc. The design and development of software is a long and complicated process and it is likely that the costs involved would be very significant.
Benefits of lifecycle costing

• The profitability of a product can then be assessed taking all costs into consideration.
• It is also likely that adopting lifecycle costing would improve decision-making regarding product introduction, product mix and for discontinuation of the product.
• It is also considered a way to enhance cost control of manufacturing costs.
• It helps in pricing decision therefore preventing underpricing at the launch point.

Conclusion:
Clearly, proposed selling price per software of GH¢250 is not advisable as it is lower than cost of production. Oria Software Inc. may either increase the selling price or undertake cost reduction techniques like value engineering, quality cycle or alternative source of cheaper material to be able to reduce the cost to be lower than GH¢ 250 per unit.

Life cycle costing is the profiling of cost over a products life, including the pre-production stage. Cost reduction may be achieved through the following means:
Target costing
The target cost is a product cost estimate derived by subtracting a desired profit margin from a competitive market price. The target cost may be less than the planned initial product cost, but will be expected to be achieved by the time the product reaches the mature production stage. At the maturity stage. The target cost may be higher than planned, hence management will want to put in place measures to target cost to an acceptable level as a one off measure. For instance, each stage in the supply chain may be reviewed, possibly with the aid of staff questionnaires, to identify areas of likely cost savings.
Value analysis
Value analysis is systematic inter-disciplinary examination of factors affecting the cost of a product or service, in order to devise means of achieving the specified purpose most economically at the required standard of quality and reliability. Value analysis will aim to eliminate non- value added activities– those that do not add value to the product in the eyes of its customers. Example goods returns and order correction, by so doing, cost associated with each stage of the product, would have been contained to an acceptable level.

• Helps to assess the profitability over the entire life cycle
• Useful for organisations producing products with shorter life cycles
• Helps in earlier actions to generate more revenue or reduce cost
• Better decision will follow from accurate assessment of total cost and revenue
• Encourages longer term thinking and forward planning.