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Case
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Reference no. 183-050-1
Authors: Thomas F Keller (Duke University)
Published in: 1983
Length: 11 pages
Data source: Field research

Abstract

Case is concerned with the accumulation of costs for bidding on fixed price contracts in a job order cost system where each item produced is highly individualistic. The company is operating in the highly competitive electronics industry. A large proportion of the output goes to the government or into major government contracts on a subcontract basis. The case was used to compare problems of pricing where a job order system is used with pricing where a process cost system is used. Problems of control were discussed, as were problems relating to the decision to bid below full cost when the major portion of the output is sold on a price basis under a competitive bid situation.
Location:
Industry:
Size:
USD8 million sales, 600 employees, USD6 million assets
Other setting(s):
1963

About

Abstract

Case is concerned with the accumulation of costs for bidding on fixed price contracts in a job order cost system where each item produced is highly individualistic. The company is operating in the highly competitive electronics industry. A large proportion of the output goes to the government or into major government contracts on a subcontract basis. The case was used to compare problems of pricing where a job order system is used with pricing where a process cost system is used. Problems of control were discussed, as were problems relating to the decision to bid below full cost when the major portion of the output is sold on a price basis under a competitive bid situation.

Settings

Location:
Industry:
Size:
USD8 million sales, 600 employees, USD6 million assets
Other setting(s):
1963

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