Assignment 2: Price Analysis for the Navigation System
Bree Butler
Professor: Larry Murphy
Strayer University
Cost and Price Analysis
October 23, 2017
Price Analysis for the Navigation System
Analyze your company’s cost classification for pricing of the navigation system. Defend your cost classification to the US government:
With our researched in conclusion and that of business economic best practices, cost classification is the total cost of business, which reflects both fixed costs and variable costs. All business involves two basic types of costs: fixed and variable costs, (Mariotti, S.,Glackin, C., 2014 (nd). There is a necessity with the separation of expenses utilizing groupings or categories that best reflect how our business should operate functionally. In the case of our navigation system and in competition, we did extensive research and analysis comparing the prices and costs of our navigation system to other manufacturers in the market, being VectorCal. We have taken into account what determining price should be set at as well as creating a price that is reasonable for our business to gain a profit, yet, meet the terms of the government contract.
Our pricing strategy accounts for all facets of our manufacturing costs let alone business overhead. Acquiring raw materials, …show more content…
Fixed costs will consist of rent and utilities as well as general and administrative expenses (salaries, accounting department costs and personnel costs). These costs are not costs that are not directly accountable to a cost object (being a project, facility, function or product). Variable cost will fluctuate in proportion to the changes of production output and are associated business expenditures. This is incurred in direct materials, piece rate labor, production supplies, billable wages, shipping, etc. Unlike a fixed cost, a variable cost is always
Bree Butler
Professor: Larry Murphy
Strayer University
Cost and Price Analysis
October 23, 2017
Price Analysis for the Navigation System
Analyze your company’s cost classification for pricing of the navigation system. Defend your cost classification to the US government:
With our researched in conclusion and that of business economic best practices, cost classification is the total cost of business, which reflects both fixed costs and variable costs. All business involves two basic types of costs: fixed and variable costs, (Mariotti, S.,Glackin, C., 2014 (nd). There is a necessity with the separation of expenses utilizing groupings or categories that best reflect how our business should operate functionally. In the case of our navigation system and in competition, we did extensive research and analysis comparing the prices and costs of our navigation system to other manufacturers in the market, being VectorCal. We have taken into account what determining price should be set at as well as creating a price that is reasonable for our business to gain a profit, yet, meet the terms of the government contract.
Our pricing strategy accounts for all facets of our manufacturing costs let alone business overhead. Acquiring raw materials, …show more content…
Fixed costs will consist of rent and utilities as well as general and administrative expenses (salaries, accounting department costs and personnel costs). These costs are not costs that are not directly accountable to a cost object (being a project, facility, function or product). Variable cost will fluctuate in proportion to the changes of production output and are associated business expenditures. This is incurred in direct materials, piece rate labor, production supplies, billable wages, shipping, etc. Unlike a fixed cost, a variable cost is always