Analyzing direct material costs, Cost Accounting

Assignment Help:

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.


Related Discussions:- Analyzing direct material costs

Cost accounting, raw an organization chart of any actual or hypothetical ma...

raw an organization chart of any actual or hypothetical manufacturing organization to show the position of management/cost accounting department within an organization and discuss

Determine inventory costs, Determine Inventory Costs Mary Cosmetics sells s...

Determine Inventory Costs Mary Cosmetics sells specialty lipstick for a retail price of $12.25 each. Mary purchases each tube for $5.00 and pays the following additional amounts: $

What is the idyllic minimum or maximum population, Q. What is the idyllic m...

Q. What is the idyllic minimum or maximum population required to use fca? Ans. FCA is not depending on size. It is merely a common-sense approach to overseeing money and k

Prepare the entry to assign factory labor to production, The gross earnings...

The gross earnings of the factory workers for Vargas Company during the month of January are $66,000. The employer's payroll taxes for the factory payroll are 8,000. The fringe ben

Direct material, Flying High Company manufactures model airplanes. During t...

Flying High Company manufactures model airplanes. During the month, it manufactured 10,000 airplanes. Each one used an average of 6.5 direct labor hours and an average of 1.5 sheet

Operating cost, 1.Assume that Abel business corporation is purchasing new e...

1.Assume that Abel business corporation is purchasing new equipment, for 350,000$ at the beginning of 2014. Assume that Abel business corporation is in the 30% corporate tax bracke

Differential costing, explain the practical application of differential cos...

explain the practical application of differential costing with the help of suitable example.

Analyzing direct material costs, You are reviewing a cost proposal, which i...

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 y

Write Your Message!

Captcha
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