"Costing systems attempt to explain how proudest consume resources but do not indicate the joint benefits of having multiple products."

Required:
Explain the statement above and discuss:
(i) how the addition of a new product to the product range may affect the "cost" of existing products;
(ii) the consequences, in terms of total profitability, of decisions to increase/decrease the product range.

Telmat is a company that manufactures mobile phones. This market is extremely volatile and competitive and achieving adequate product profitability is extremely important. Telmat is a mature company that has been producing electronic equipment for many years and has all the costing systems in place that one would expect in such a company. These include a comprehensive overhead absorption system, annual budgets and monthly variance reports and the balanced scorecard for performance measurement.
The company is considering introducing:
(i) target costing; and (ii) life cycle costing systems.

Required:
Discuss the advantages (or otherwise) that this specific company is likely to gain from these two systems.