Question

Help Save & Imperial Devices (ID) has offered to supply the state government with one model of its security screening device at cost plus 20 percent." ID operates a manufacturing plant that can produce 22.000 devices per year, but it normally produces 20,000. The costs to produce 20,000 devices follow: Cost per Device Production costs: Materials Labor Supplies and other costs that will vary with production Indirect cost that will not vary with production Variable marketing costs Administrative costs (will not vary with production) Totals Total Cost $ 1,200,000 1,640,000 780,000 640,000 1,560,000 100,000 $ 6,900,000 $ 60.88 82.00 39.00 32.00 78.00 54.00 $345.00 Based on these data, company management expects to receive $414.00 E $345.00 * 120 percent) per monitor for those sold on this contract. After completing 2,000 monitors, the company sent a bill invoice) to the government for $828,000 2,000 monitors $414.00 per monitor). The president of the company received a call from a state auditor, who stated that the per monitor cost should be: Materials Labor Supplies and other costs that will vary with production $ 60.00 82.00 39.00 $ 181.00 Therefore, the price per monitor should be $217.20 - $181.00 x 120 percent). The state government ignored marketing costs because the contract bypassed the usual selling channels. Required: For each of the four situations, calculate the cost basis per device based on the information shown above. (Round Intermediate calculations and final answers to 2 decimal places.) Options: A. Only the differential production costs could be considered as the cost basis. Nex

Answer 1

The rost basis per dealce is calcalated helown Iper device cost / Recommended basis Price per device I option t 8 181 18217.20. option 'B 8345 9414 optionnel $ 259 $310.8 option "D" $337 $.404.40 Rete option CA Recommended Price: 81818 100 % 521720 optioniß Recommended praz $345X 1207 op herre" fexccluding mosketing costs_ il per dNice Cost = $ 60 +382 +39 |_+$ 640,000 22000 + $ 0 + Blog 0,000 22000 = 860 + $82f $39+829 + 50+ $49 =$259 I per device cost bass = $2591 Cus recommended piu per device -82594 120% - 8310.80 0 ophon uplicineluding marketing cost 1 per device cost basis - 8259+578 - $337 per device (ii) Recommended price $_337x 1207 94044-0.