Explore BrainMass
Share

Explore BrainMass

    Defective Pricing Actions

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    1.What action must you take before you can require an offeror to submit cost or pricing data to support an offer priced at $95,000?

    2. Calculate the amount of the final price adjustment because of defective pricing. Labor was overpriced by $15,000. Material was under-priced by $10,000. No items have been delivered. How much should the price adjustment be?

    Contract As Awarded:

    Material $ 80,000
    Material OH 5% $ 4,000

    Labor $ 40,000
    Labor OH 100% $ 40,000

    Total Cost Input $164,000
    G & A 10% $ 16,400
    Total Cost $180,400

    Profit 10% $ 18,040
    Total Price $198,440

    6. Calculate the amount of the final price adjustment because of defective pricing based on the following:
    Contractor unintentionally overpriced their material costs by $75,000 and under-priced their direct manufacturing labor costs by $50,000. Overhead rates used to price the original contract are given below:
    Material OH 15%
    Engineering OH 75%
    Manufacturing OH 124%
    Lawn Maintenance OH 1.5%
    G &

    © BrainMass Inc. brainmass.com October 10, 2019, 1:19 am ad1c9bdddf
    https://brainmass.com/business/warrant-pricing/defective-pricing-actions-329498

    Solution Preview

    ANSWERS

    Question 1

    You need to determine the eligibility of the bidder. That is if it has the financial and ...

    Solution Summary

    Defective pricing actions are examined.

    $2.19