You are reviewing a cost proposal, which includes an

$800,200 direct material estimate. after 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 6%. Using this 6% decrement factor, what

cost should you estimate for those items? Remember that the average sample item

cost is 106%of what it ought to be.

Given your answers to questions 1 and 2, what should you

estimate for total material cost?

You are reviewing a cost proposal, which includes an

$800,200 direct material estimate. after 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 6%. Using this 6% decrement factor, what

cost should you estimate for those items? Remember that the average sample item

cost is 106%of what it ought to be.

Given your answers to questions 1 and 2, what should you

estimate for total material cost?

You are reviewing a cost proposal, which includes an

$800,200 direct material estimate. after 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 6%. Using this 6% decrement factor, what

cost should you estimate for those items? Remember that the average sample item

cost is 106%of what it ought to be.

Given your answers to questions 1 and 2, what should you

estimate for total material cost?

$800,200 direct material estimate. after 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.

$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 6%. Using this 6% decrement factor, what

cost should you estimate for those items? Remember that the average sample item

cost is 106%of what it ought to be.

Given your answers to questions 1 and 2, what should you

estimate for total material cost?