You are chief accotmtant for your company, which manufactures three joint products. The company president has told you that it is very important for the costs of the three products to be determined accurately because the company is negotiating a contract to sell a substantial part of its product on a cost-plus basis to a major defense contractor. The contract will call for a sailes price equal to manufacturing cost, plus 25 percent. What do you think of this proposal? Do you have any suggestions for items to be included in the contract?

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