The air force ignored marketing costs

Assignment Help Cost Accounting
Reference no: EM13879017

Alameda Instruments (AI) has offered to supply the Air Force with computer monitors at cost plus 20 percent. AI operates a manufacturing plant that can produce 44,000 monitors per year, but it normally produces 40,000. The costs to produce 40,000 monitors follow:

789_269-B-C-A-D-M (204).png

Based on these data, company management expects to receive $174 (= $145 - 120 percent) per monitor for those sold on this contract. After completing 500 monitors, the company sent a bill (invoice) to the government for $87,000 (= 500 monitors - $174 per monitor). The president of the company received a call from an Air Force auditor, who stated that the per monitor cost should be: 

Materials......................................................................................... $25

Labor............................................................................................... 50

Supplies and other costs that will vary with production................. 15

$90Therefore, the price per monitor should be $108 (= $90 - 120 percent). 

The Air Force ignored marketing costs because the contract bypassed the usual selling channels. 

Required :
1.What price would you recommend?Why? 

Reference no: EM13879017

Questions Cloud

Different kind of childhood trauma : different kind of childhood trauma
Write the lagrange function for this problem : A person's utility function (U) is given by the following expression: U(x,y) = (x + 2)(y + 1)- Write the LaGrange function for this problem
Explain types of sleep disorder : Define Sleep disorder and Explain types of sleep disorder in one page.
Problem regarding the normal shock stands : Air flows through a duct as in Fig P9.84, where A1 = 24 cm2, A2 = 18 cm2, and A3 = 32 cm2. A normal shock stands at section 2.
The air force ignored marketing costs : Alameda Instruments (AI) has offered to supply the Air Force with computer monitors at cost plus 20 percent.
Calculate optimal price, and profit for organization : Assuming that the firm acts as a monopolist, calculate the optimal price, quantity, and profit (i.e., TR - TC) for the organization. After using algebra to find the solution, present your results graphically.
What are the benefits and costs of fdi to the host country? : What are the benefits and costs of FDI to the host country?
Testing a leap year library : Write a program Checkerboard.java that takes an integer command-line argument N, and uses two nested for loops to print an N-by-N "checkerboard" pattern
Determine the moment of that force : A mechanic uses a piece of pipe AB as a lever when tightening an alternator belt. When he pushes down at A, a force of 580 N is exerted on the alternator B. Determine the moment of that force about bolt C if its line of action passes through O.

Reviews

Write a Review

Cost Accounting Questions & Answers

  Cost accounting assignment

Evaluate Method of measuring costs associated with production, budgeting process, normal job-order costing system , master budget, cycle time.

  Prepare the journal entries

Prepare the journal entries to record the bond issue and interest expense.

  Advise as to the liability of all the parties

Write a report on given case study and Advise as to the liability of ALL the parties both under common law and the Corporations Law.

  Prepare revenues budget

Prepare Revenues budget and Production budget in units

  Effect of exchange rate changes on cash and cash

Effect of exchange rate changes on cash and cash

  Corporate governance

You are to reflect on how this case of China Sky relates to what the arguments for and against allowing audit firm partners and/or employees to join audit committees.

  Cost-benefit analysis

A cost-benefit analysis of electronic medical records in primary care

  Non-annual interest rates and annuities

Theory of Interest- Non-annual interest rates and annuities

  Job costing in service organizations

How is job costing in service organizations different from job costing in manufacturing environments?

  Accounting for bad debt expense

Accounting for bad debt expense

  Accounting and partnership problems

Accounting and Partnership problems

  Development of relevant cash flows

Development of relevant cash flows - Cost estimating and financial analysis

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd