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Part 1: This week we continue our discussion on the cost objective for direct material, direct labor, other direct costs, indirect costs, facilities cost of money, and profit/fee. This week we will focus on how this information should be communicated internally and externally. What information might be considered proprietary and why?
The reading material is
Two videos to watch are:
Three types of manufacturing costs located at https://www.youtube.com/watch?v=bgp_AAxUJpQ
Cost of goods sold budget located at https://www.youtube.com/watch?v=HW0L8AfDIkE
Also, consider cost elements in term of direct or indirect? Can the material cost be classified different- hint CAS! Do we expect contractors to track an engine block the same as they would nuts and bolts?
FAR 15.407-4 provides for the opportunity to evaluate a manufacturing program based on what it SHOULD COST instead of evaluating a manufacturer on what it may have historically recorded for its Cost of Goods Sold (COGS) (FAR, 2016 (FAR 15.407-4)). Recall the Better Buying Power Initiatives, as Mr. Kendall says “don’t tell me what it will cost but what it should cost”. When a procurement activity involves non-commercial manufactures, and, when it is limited, or no competition for acquiring the product elsewhere in the marketplace a Should Cost Review may be performed (FAR, 2016 (FAR 15.407-4)). A Should Cost Review will look at both program (manufacturing) costs and the associated plant overhead; together, government and contractor can establish expectations of hard material costs, hard labor costs and manufacturing overhead, when combined will establish expected COGS for what can be considered a tiered manufacturing program specific to the effort being procured by the government (FAR, 2016 (FAR 15.407-4)).
In a prior class a student stated:
“As Contract Managers, it’s important that we know all the tools available to us that will allow us to effectively procure goods and services at fair and reasonable prices. Understanding manufacturing processes, accounting of a prime or tiered manufacturers COGS and means of establishing and evaluating a cost objective (such as utilizing SCI) will enable us to successfully negotiate procurement of goods and services on behalf of the taxpayer.”
Do you agree with the statement?
Instructions: Your initial post should be at least 250 words.
Part 2: Reading
George, G., Haas, M. R., & Pentland, A. (2014). Big data and management Academy of Management Journal, 57, 321-326. doi:10.5465/amj.2014.4002
Singh, H., & Singh, G. (2017). Big data-A review. I-Manager’s Journal on Information Technology, 6(1), 25-35. Retrieved from https://search-proquest-com.ezproxy2.apus.edu/docview/1920564759?accountid=8289
This week we have fun with some data. We calculate a dependent variable projection using Excel to calculate simple regression analysis.
Use the information at the URL listed below to create an Excel spreadsheet that solves a linear forecast equation, using Excel’s regression tool. Use the Excel Forecasting tools to create projected revenue and profit, based on historical data. You create a spreadsheet with x and y variables in columns and then create a graph. On the graph, use the chart feature and follow instructions at the website. Create three projected future values for the dependent variable. After completing the Excel spreadsheet, discuss the following in the forum:
In what ways can the Excel forecast tool help determine future base values from knowing the relationship between past values. The table below is an example. If you want to on your own, use the Excel forecast to predict future periods, using the same technique as the example at the URL.
http://blog.trap.it/blog/stats-for-marketers-a-sim…
Below you have been given some data over time; conduct a simple regression analysis of the data over time. What is the trend or message that this data is telling you? What might be missing from this data?
Discuss the function of the following statistical terms. Why are they important?
Line of best fit
R2 value
Slope
The following can be used to practice the Excel Regression if you like.
|
Pool |
Base |
Our review Determined |
|
|
2011 |
3,000,000 |
1,500,000 |
|
|
2012 |
3,200,000 |
2,000,000 |
|
|
2013 |
3,300,000 |
2,200,000 |
|
|
2014 |
3,600,000 |
2,500,000 |
|
|
2015 |
3,400,000 |
2,300,000 |
|
|
Proposed |
3,000,000 |
2,400,000 |
2,600,000 |
Instructions: Your initial post should be at least 250 words
Part 3: Chapter 8 of the Cost-Based Pricing: A Guide for Government Contractors
DISCUSS FORWARD RATE PRICING RATE AGREEMENTS. DO YOU FEEL THAT THEY ARE USEFUL FOR GOVERNMENT CONTRACTING? ARE THEY RISKY? ARE THEY HELPFUL IN PLANNING A PROGRAM?
THE INITIAL DISCUSSION SHOULD BE AT LEAST 250 WORDS
