Paper

Running head: UNIVERSAL DRONE ANALYSIS 2

2

UNIVERSAL DRONE ANALYSIS

Institution’s Name:

Student’s Name:

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Cost classification

Reasonable cost;

The cost will only become reasonable when the price or the nature of the goods or services reflects on the actions taken with the prudent person at the prevailing circumstances when making the decisions to what cost should be incurred. The Universal Drone Organization acquires a reasonable cost is services and products because of the different reasons. Their cost in the products follows each regulation, requirements, and laws as imposed with the company or the government. The product prices can be slightly lower when it is compared to other Drone companies. Prices do differ with a small margin while the Universal Drone Organization is becoming the cheapest. The company's management came together, then used the policing of the existing organization in the development of the incurred cost. However, the management that came up with an incurred cost made prudence, whereas all of the parties were considered, which included the government, public, students, employees, and the organization. Hence, the cost that is incurred with the Universal Drone Company is reasonable (Alkhatib, 2020).

Allowable cost;

The cost can be considered allowable if the cost is permitted as the cost that is within the organization. The F or A rates, federal government general regulations, or in terms of the specific award. The costs in the Universal Drone Company are the allowable costs because they are in the general federal regulations or institutions F and A rates. With regards to the costs of the Universal Drone Company, which signed the financial report certificate on how it was required with the federal regulations (Morgan, 2019).

Allocable cost;

In the allocable cost, the costs will only be considered in a certain Award when the ServiceService or product can be charged directly in the award based on the advantages provided. There are the benefits of the cost in the Universal Drone Company at the funding sources. The cost benefits in the award are aimed at where it is used as the basis in the allocation of the cost where the reasonable estimation in the benefits is used (Patrutiu-Baltes, 2016).

Analysis of volume-based costs

Fixed cost;

This is the type of cost that never varies within a short period with the output level. However, the fixed cost does change in the long term. The fixed cost of the Universal Drone Organization may include advertising, insurance, rent, and salaries. As the worldwide organization and the need for its expansion, the organization may rent various buildings in the drones' manufacturing. There will be increment for advertisement; thus, the organization will require various insurance coverage for the property, workers, and the buildings. Employees' salaries might be increased with the dependence of the output or encouragement of the innovation. Various employees can be employed with the organization because of the organization’s expansion (Alkhatib, 2020).

Variable costs;

The cost may vary directly with the dependence of the output level. The cost may include packaging, labor, or raw materials. When there is high competition or the need for expansion, the company may higher more creative, skilled, or innovative personal in offering a lot of skilled labor. There will be identifying the best raw materials in the production community or a high-quality product. In retaining or attracting the customers, a company should focus on the packaging that will be unique for various organizations and safe in the products of the customers. The product's volume might increase when the Universal Drone Company increases its cost of variable costs like raw materials (Morgan, 2019).

Semi-variable costs;

They are the cost that is not variable and fixed. Companies' expenses may fall under the semi-variable cost. Electric and telephone bills may fall under the semi-variable cost. The electric bills may increase when there is a lot of drone produce. The telephone bill will also increase because of the overuse of the staff members (Patrutiu-Baltes, 2016).

Pricing Analysis through the government

Comparison of proposed prices;

Different types of techniques can be put into effect with the government in ensuring that it arrives at the reasonable or fair price in contracts awarding. At the comparison of the proposed prices, in comparing the price, the government gets in comparing the prices obtained with the organization, which is needed for the contract. The government will also compare the prices presented and compared to the historical prices paid with the government itself and other organizations for the same ServiceService or product it is contracting. Thus, Universal Drone Company is supposed to research to know the cost for the services and products being provided when it is based on the prices in other companies. The organization is also supposed to identify other companies that had been given the contract with the government to the previous years with their prices before any proposal of a certain price (Alkhatib, 2020).

Comparison of market-based price;

The government will make a comparison of the prices with the commodities that are existing at the market prices which are published. Some of the comparisons may include comparing the published market prices so that the products will be supplied (Morgan, 2019).

Comparison of prior proposed prices;

The prior prices in the same contract can be used to be the basis of comparison. Because of the time-lapse or change, the method will not give a government a valid basis compared to the prices. The government may decide to choose the comparison in the proposed prices. The latest prices can be presented in the government hence becoming the better way in a fair price arrival. The historical prices of the contracts given with the government and any other organization give the government a range to which fair prices will be charged with the company. Universal organizations are therefore supposed to analyses the prices of the other organization and the organizations given the same contract before they come up with the best prices proposed that may enable the organization to win the contract (Patrutiu-Baltes, 2016).

REFERENCE

Alkhatib, N. S., Erstad, B., Ramos, K., McBride, A., Bhattacharjee, S., Slack, M., & Abraham, I. (2020). Pricing methods in outcome-based contracting: δ3: reference-based pricing. Journal of medical economics, 1-7.

Morgan, N. A., Whitler, K. A., Feng, H., & Chari, S. (2019). Research in marketing strategy. Journal of the Academy of Marketing Science, 47(1), 4-29.

Patrutiu-Baltes, L. (2016). Inbound Marketing-the most important digital marketing strategy. Bulletin of the Transilvania University of Brasov. Economic Sciences. Series V, 9(2), 61.