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: Quality measurement (QM) Package Inventory movement (IM) Distribution logistics (DL) Year 1 Year 2 Year 1 Year 2 Year 1 Year 2 Estimated demand (units) 25,000 10,000 2,000 3,000 4,000 3,500 Selling price 1,800 1,600 3,000 3,000 2,500 2,200 Costs 000 000 000 000 000 000 Research & Product Design 6,500 12 5,100 100 2,400 910 Production 750 2800 900 1200 1500 1400 Marketing 1,400 2,600 1,200 800 2,400 1,700 Distribution 150 600 240 360 600 360 Customer call out and support 500 1,250 450 850 2,200 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 the three products and advise the company on strategies for improved profitability. (6 marks)