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

Example of Methods of Allocating Service Costs Suppose the following data: User department Unit of Service Provided Costs Prior to Service Dep

Purpose of Cost Accounting Information Cost accounting is employed for a number of reasons, some of that are briefly described in the given points as: a) Accounting for co

I just do not know which form those numbers should go in. I would canculate the results myself. Thanks John and Ellen Brite are married and file a joint return. They have no depend

CVP for Multiple Products What number of businesses sells only one manufactured goods? The reality is that firms usually give us the diverse product line, and the individual pr

Horton Co. was organized on January 2, 2010, with 500,000 authorized shares of $10 par value common stock. During 2010, Horton had the following capital transactions: January 5-iss

Morrow Company applies overhead based on direct labor hours. At the beginning of the year, Morrow estimates overhead to be $620,000, machine hours to be 180,000, and direct labor h

Process Cost Report This is a commonly employed statement that traces the flow of units produced and costs incurred in the production process. The report is prepared for every

1. You are required to download the latest annual report published by one of the following institutions: - Adult Multicultural Education Services - Centre for Adult Education

1. Why does rent control result in a shortage of rental units. 2. How does price elasticity of demand affect how much of a tax is passed on to the consumer and how much is absor