A life cycle costing that incorporates the effects of environment is essential to support the design decisions required during today`s product or system developments. This study addresses the important issues and application procedures of LCC(life-cycle costing) encountered during new product or system developments. "CAIV(Cost As an Independent Variable)" initiative being promoted by the Department of Defense in US to shorten the system development cycle provides an effective model demonstrating how to accelerate the design iterations that involves trade-offs between technical performance and cost parameters. This paper describes the development of a LCC tool based-on ABC(Activity Based Costing) approach to enable the extension of the benefits of CAIV concepts to commercial applications. The tool adopts an dbject-oriented software structure and utilizes the Unifies Modelling Language(UML) for modelling the architecture.