QuantumTM (50 points)

Summary

A company finds that it is receiving fewer large orders for electronic testing instruments that are relatively simple to producecustomers are saying the company is not price competitive for such products. On the other hand, the company is receiving more small orders for complex instruments and customers seem happy with the prices they pay for them.

Shows how a traditional costing system can systematically overcost or undercost certain products.

Links ABC to decision making.

1. What's the situation facing QuantumTM?

2. What's the ABC cost of the Monitor and the Analyzer?

3. What's the ABC cost of the data logging device?

4. The customer for the data logging device has a bid from a competitor for $22,000. Should QuantumTM meet this price?