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Defines life cycle costing, which gives rise to Life Cycle Cost (LCC). Defines LCC as “The total cost of the system or product under study over its complete life cycle or the duration of the period of study, whichever is the shorter”. Stresses that LCC can be used at whatever level is chosen (estate or, say, a boiler). Explains the timing and mechanism of measurement. Argues that the application of LCC at an early design stage will greatly enhance system design and operation. Offers other pertinent definitions.

To provide an overview of research published in the management accounting literature on methods for cost management in new product development, such as a target costing, life cycle costing, component commonality, and modular design.

The structured literature search covered papers about 15 different cost management methods published in 40 journals in the period 1990–2013.

The search yielded a sample of 113 different papers. Many contained information about more than one method, and this yielded 149 references to specific methods. The number of references varied strongly per cost management method and per journal. Target costing has received by far the most attention in the publications in our sample; modular design, component commonality, and life cycle costing were ranked second and joint third. Most references were published in Management Science; Management Accounting Research; and Accounting, Organizations and Society. The results were strongly influenced by Management Science and Decision Science, because cost management methods with an engineering background were published above average in these two journals (design for manufacturing, component commonality, modular design, and product platforms) while other topics were published below average in these two journals.

The scope of this review is accounting research. Future work could review the research on cost management methods in new product development published outside accounting.

The paper centers on methods for cost management, which complements reviews that focused on theoretical constructs of management accounting information and its use.

This article surveys the literature dealing with theory and applications of life cycle costing (LCC). It deals with the literature published in the last 25 years and provides 667 references.

The paper provides an overview of research published in the innovation and operations management (IOM) literature on 15 methods for cost management in new product development, and it provides a comparison to an earlier review of the management accounting (MA) literature (Wouters & Morales, 2014).

This structured literature search covers papers published in 23 journals in IOM in the period 1990–2014.

The search yielded a sample of 208 unique papers with 275 results (one paper could refer to multiple cost management methods). The top 3 methods are modular design, component commonality, and product platforms, with 115 results (42%) together. In the MA literature, these three methods accounted for 29%, but target costing was the most researched cost management method by far (26%). Simulation is the most frequently used research method in the IOM literature, whereas this was averagely used in the MA literature; qualitative studies were the most frequently used research method in the MA literature, whereas this was averagely used in the IOM literature. We found a lot of papers presenting practical approaches or decision models as a further development of a particular cost management method, which is a clear difference from the MA literature.

This review focused on the same cost management methods, and future research could also consider other cost management methods which are likely to be more important in the IOM literature compared to the MA literature. Future research could also investigate innovative cost management practices in more detail through longitudinal case studies.

This review of research on methods for cost management published outside the MA literature provides an overview for MA researchers. It highlights key differences between both literatures in their research of the same cost management methods.

Although life cycle costing (LCC) is well established in theory and practice, little is known about the conditions of its adoption and its impact on the achievement of cost-management goals. Therefore, this paper aims to analyze the adoption and benefits of LCC.

The analyses are based on questionnaires collected from a survey of German firms.

The results demonstrate that the extent of LCC adoption is positively associated with the extent of guarantee and warranty costs, voluntary upfront and follow-up costs for ecological sustainability and the extent of target costing adoption. In contrast, the extent of LCC adoption is negatively associated with the amount of precursors and/or intermediates that are purchased. The results also demonstrate that firms perceive LCC to be beneficial for various aspects of cost management. Firms report that the greatest benefit of LCC is related to the identification of cost drivers.

This investigation provides a starting point for future studies of the conditions of LCC adoption and the benefits of LCC. This study is subject to limitations, particularly with respect to the operationalization of our independent variables, the number of contextual variables and the general limitations of survey research.

The results inform practitioners of the situations in which it is most appropriate to adopt LCC. In addition, this study identifies various cost-management goals that are supported by the use of LCC.

This study provides the first comprehensive analysis of the conditions of LCC adoption and advances the literature regarding the impact of LCC on the achievement of cost-management goals. Furthermore, this study provides a starting point for future research into the implementation of LCC and the effects of LCC on management accounting practices.

The purpose of this paper is to discuss life cycle cost management and highlight the practical challenges related to collecting adequate data and practicing long‐term cost management in an uncertain environment.

The paper reports a case study conducted in the Finnish Defence Forces. As part of the case study, a life cycle cost model for a case product was developed.

Activity‐based life cycle cost modeling can provide relevant information for varying product management needs at different stages in the life of a product. Quantification of uncertainty is one of the elements in the modeling that can improve the feasibility of LCC both for cost estimation and tracking purposes.

Only a few empirical studies on life cycle costing have been reported which focus on the defence sector. The paper contributes to our understanding of how LCC can be used in a continuous manner and depicts how LCC can produce a sharpened cost image of a particular product.

New management techniques such as ‘just‐in‐time’, ‘lean manufacturing’ and ‘Six Sigma’ allow management accountants to shift their focus from the management and control of production processes to the management of strategic issues. This paradigm shift resulted from shorter product life cycles, due to technological advances and a more competitive business environment. Recent revisions to the International Accounting Standards which are particularly supportive of life cycle costing and project management are likely to increase the focus on strategic management accounting further. This article describes developments in management accounting and the recent convergence of financial reporting in terms of International Accounting Standards with strategic management accounting and project management techniques. Strategic management accounting (particularly life cycle costing) involves applying project management techniques and using the calculus of investment to manage the project as a whole. This contrasts with managing only costs and revenues during the manufacturing phase of a project. The article demonstrates that project management techniques and the calculus of investment provide the information needed to account for the value of a project in terms of IAS 38: Intangible Assets. This will ultimately give rise to both improved decision‐making and more relevant financial reporting.

Despite existing life cycle costing (LCC) method descriptions and practicable suggestions for conducting LCC analyses, no systematic analyses on actual implementations of LCC methods exist. This paper aims to review reports on LCC applications to provide an overview of LCC uses and implementation feasibility.

A review of LCC cases reported in academic and practitioner literature. Case reports were compared against one another and against the defining articles in the field.

Most of the reported LCC applications were far from ideal. Compared to the methods suggested in the literature many of the case study applications: covered fewer parts of the whole life cycle, estimated the costs on a lower level of detail, used cost estimation methods based on expert opinion rather than statistical methods, and were content with deterministic estimates of life cycle costs instead of using sensitivity analyses.

This review is limited to reported LCC applications only. Further research is encouraged in the form of a field‐based multiple‐case study to reveal context‐specific dimensions of LCC analysis and implementation challenges in more detail.

This review highlights the difficulty of conducting a reliable LCC analysis, and points out typical problems that should be carefully considered before drawing conclusions from the LCC analysis.

First systematic analysis of LCC applications that gives directions for further research on the LCC concept.

Sustainable building design suffers from a lack of reliable life cycle data. The purpose of this paper is to compare life cycle costs of sustainable building projects, examine the magnitude of various cost drivers and discuss the implications of an emerging shift in cost drivers.

This paper is based on data from 21 office buildings certified in Denmark according to the sustainable certification scheme DGNB.

The paper supports previous findings that construction costs and running costs each roughly make up half of the life cycle costs over a 50-year period. More surprising is the finding that the life cycle costs for cleaning are approximately twice as high as the supply costs for energy and water.

The data set is based on actual construction costs of office buildings constructed in 2013-2017. Although all running costs are calculated rather than measured, they are based on a more detailed, specific and industry-supported set of calculation assumptions than is usual for life cycle costing studies because of extensive collaborative work in a number of concomitant national research and development projects.

Authorities, clients and building professionals heavily emphasise energy-saving measures in new Danish buildings. The paper suggests redirecting this effort towards other more prominent cost drivers like cleaning and technical installations.

This paper provides a notable contribution to the academic understanding of the significance of different cost drivers as well as the practical implementation of life cycle costing.