Haverhill Electronics (HE) has offered to supply the county government with one model of its security screening device at "cost plus 25 percent." HE operates a manufacturing plant that can produce 22,000 devices per year, but it normally produces 20,000. The costs to produce 20.000 devices follow. Production costs: Materials bk Labor int ences Supplies and other costs that will vary with production Indirect cost that will not vary with production Variable marketing costs Administrative costs (will not vary with production) Totals Cost per Total Cost Device $ 1,800,000.00 $90.00 2,800,000.00 140.00 840,000.00 42.00 840,000.00 42.00 480,000.00 24.00 4,440,000.00 222.00 $ 11,200,000.00 $560.00 Based on these data, company management expects to receive $700.00 ($560.00 125 percent) per device for those sold on this contract. After completing 200 devices, the company sent a bill (invoice) to the government for $11,200,000 (200 devices $700.00 per device) The president of the company received a call from a county auditor, who stated that the per device cost should be as follows. Materials Labor Supplies and other costs that will vary with production $ 90.00 140.00 42.00 $ 272.00 Therefore, the price per device should be $340.00 ($272.00 125 percent). The county government ignored marketing costs because the contract bypassed the usual selling channels