Cost

This assignment continues with your analysis of your company, Universal Drones, Inc., and their different types of costs. Being discussed are various cost classifications and volume based costs. You will finish this assignment by discussing different pricing methods that the government can consider.

In order to complete this assignment, refer to the scenario in the Introduction of New Drone Company Assignment where you discussed VectorCal and your company.

Write a 2–3 page paper in which you:

Analysis of Universal Drones, Inc.’s Cost Classifications

Analyze and provide examples in detail of the following cost classifications for your company.

Reasonable costs.

Allowable costs.

Allocable costs.

Analysis of volume based costs

Analyze and provide detailed examples of how the following costs change depending on volumes produced by Universal Drones, Inc.

Fixed costs.

Variable costs.

Semi-Variable costs.

Pricing Analysis by the government

Assuming that a firm fixed price contract will be awarded, discuss the following pricing methods and indicate which one the government will probably choose. Also indicate how your company will ensure that the prices will be reasonable for the government. Remember to provide a rationale for each of these costs

Comparison of proposed prices.

Comparison of market based prices.

Comparison of prior proposed prices.

Use at least three quality resources in this assignment.

Running head: UNIVERSAL DRONES INC. 1

UNIVERSAL DRONES INC. 4

Universal Drones Inc.

Marquita Bryant
BUS 315 – Cost and Price Analysis
Professor Larry Murphy

Strayer University
July 26, 2020

Universal Drones Inc.

Universal Drones Inc. is a company that aims at providing innovative drone systems across the globe. These systems work best with the current innovation. The company also fabricates drones as well as manufacturing stealth drone machines. The drones have route frameworks, with a pivoting capability to rotate for about 360 degrees. Universal Drones Inc. also has established controlled programs that control the functionality of the drones from the base. The drones’ feature is automated to allow faster and efficient operation. Many governments have opted to use drones and drone machines in the military and air force operations.

Vision of Universal Drones Inc.

To make automated drones and drone machines suitable and compelling in their functionality and ability to work across several niches and departments.

Mission of Universal Drones Inc.

Universal Drones Inc. is primarily focused on making drone systems and route frameworks that match the current 3D innovations with the ability to provide solutions to negligence in the use of drones for military and air force operations.

The key personnel at Universal Drones Inc.

Universal Drones Inc. will include all professionals and experts in information technology systems, engineers, and other skilled personnel essential in operating and ensuring efficient functioning of the system.

Why should I form the Universal Drones Inc.

Currently, drones are everywhere, and anywhere they are needed. They are used in zipping the skies and acrobatic functionality in houses, while others are used to stalking people from user-defined distances. Drone technology is rapidly evolving. Many consumers are becoming interested in their usages, depicting that soon, the use of drones is likely to dominate the wave of technology and functionality of various businesses. VectorCal has been a dominant company in the current drone market in supplying drones and drone-related products (Jong-Hyuk, 2006). However, after reading through their case analysis, I have realized that they charge a higher fee on the production. As if that is not enough, VectorCal Company takes a long time to manufacture what is ordered by the consumers. This is why I would like to develop the Universal Drones Inc. which will offer the latest technologically enabled drones at an affordable price and manufacture them within the shortest time possible to avoid spending much time in manufacturing, to compete with the incumbent VectorCal Company.

VectorCal Company

VectorCal is a company that deals with the manufacture and supply of drones. Currently, it is the dominant entity in the drones’ market, with the best drone technology like no other company. The company’s managers utilize all their resources through long-term, short-term, and medium-term forecasting to ensure that they stay afloat. Therefore, the company majorly focuses on the price, time for preparation, and the accuracy in their manufacture of drones. The edge and market niche for VectorCal is the reason for their increased costs since they exhibit a high running cost in trying to remain relevant and competitive in the market.

Mission

The mission at Vector Cal states that the company aims to remain the top manufacturer and supplier of drones through the use of long-lasting materials, new technological innovations, and the smartest processor chips to maintain their competitive nature.

Vision

VectorCal is focused on producing the best cutting edge drones, with the newest technology for efficiency and reliability.

Staff

VectorCal hires qualified and skilled personnel. It projects on having young, talented, and innovative working staff who has helped the company remain competitive and float in drones. It also pays its workers a good salary and rewards those who help and contributes to the development of the best navigation drones. (Price)

Pricing analysis method at VectorCal

VectorCal uses the historical pricing method in analyzing its products. This would best serve the accounting managers since they have prior costs from their previous contracts with the government. When Universal Drones Inc. competes with VectorCal Company, the adequate price competition analysis will not be essential because there will be few competitors for the contract. From the case analysis, it is evident that VectorCal does not use efficient qualitative methods in forecasting their short-term predictions. Market research and Delphi methods will be the basis in Universal Drones Inc. through this; expert opinions will be essential in advertising our products, and the answers given will be vital in adjusting the products to suit consumer needs and preferences.

Cost considerations

High costs will be incurred in the market because the marketing for Universal Drones Inc. will be done across nations and regions. The company will develop and innovate according to the market trends; hence, it will keep the clients updated and conformed to the market trends and changes. Semi-variable costs are a mixture of fixed and variable costs. Universal Drones will employ semi-variable costs with lower fixed costs to ensure a lower breakeven point. Allocated costs are specifically assigned for a certain activity or project in a business. Allocated costs, in this case, will be costs in manufacturing drones and advertising them. Indirect costs are not directly accounted for in a given project. Administration, personnel, and security payments will be the indirect costs at Universal Drones Inc. (Averkamp, 2020).

References

Averkamp, H. (2020). What are indirect manufacturing costs?: AccountingCoach. Retrieved July 26, 2020 from https://www.accountingcoach.com/blog/what-are-indirect-manufacturing-costs

Jong-Hyuk, Sukkarieh, and Wishart. (2003). Real-Time Navigation, Guidance, and Control of UAV using Low-Cost Sensors. Retrieved July 26, 2020 from https://www.researchgate.net/publication/221323096_Real-Time_Navigation_Guidance_and_Control_of_a_UAV_Using_Low-Cost_Sensors

Price Analysis For Navigation System. (2017). Retrieved July 26, 2020 from https://www.researchomatic.com/price-analysis-for-navigation-system-180432.html