Analyzing direct material costs, Cost Accounting

You are reviewing a cost proposal, which includes an $800,200 direct material estimate. After Initial examination of the proposal, you note that there are 500 material items, but you also note that 20 high-cost items account for $620,000 of the total. The remaining $180,200 is spread across 480 relatively small purchases.

Examination of the 20 high-cost items (estimated at $620,000) shows that all are properly priced except one item. That item is overpriced by $20,000. What should be your objective for these 20 items?

After analyzing a sample of the remaining 480 items, you find that the sample is overpriced by six percent. Using this six percent decrement factor, what cost should you estimate for those items? Remember that the average sample •tern cost is 106 percent of what it ought to be.

Posted Date: 3/30/2013 5:37:46 AM | Location : United States







Related Discussions:- Analyzing direct material costs, Assignment Help, Ask Question on Analyzing direct material costs, Get Answer, Expert's Help, Analyzing direct material costs Discussions

Write discussion on Analyzing direct material costs
Your posts are moderated
Related Questions
What depreciation method does Amazon use for property and equipment? What is the range of useful lives for buildings and for fixtures and equipment? Do these useful lives make sens

What are the benefitss and drawbacks of standard costing?

1. The table below gives data for Southland where there are three consumption goods: bananas, coconuts and grapes. Goods Quantity in base period basket

We have noticed that working capital is needed to finance that portion of current assets that is not financed through current liabilities. We also noticed that the investments repr

Find a journal article online about just-in-time inventory systems. In the subject line of your post, include the title of the article that you read. Post a link to that article wi

Factory Overhead Budget This budget represents the forecasts of each the production variable and fixed and semi-variable overheads to be incurred throughout the budget period.

Sleep Corporation was organized on January 1, 2011. During its first year, the corporation issued 40,000 shares of $5 par value preferred stock and 400,000 shares of $1 par value c

Imperial Sandwich Plc is to be established shortly. The founders are considering their options with regard to capital structure. A total of £5 m will be required to establish the b

Timbatown Pty Ltd is a manufacturer of timber tables and chairs. The company mostly sells on a retail basis to household consumers, but occasionally receives large orders for table

Shrinkage - Production Process This refers to a disappearance or loss of material inputs utilized throughout the production process. It happens mainly via the evaporation. Thi