Analysis of Direct Cost Assignment Example | Topics and Well Written Essays - 750 words

Analysis of Direct Cost - Assignment Example This provision is both advantageous and disadvantageous in that the VectorCal Company will readily acquire iron and steel hence evading searching and high transportation costs. On the other hand, it will be harmful to the company if the steel and iron producing companies in the US decide to charge high prices of their products due to the absence of open markets to trigger competition, which will eventually lead to lower competitive prices in the industry. The other raw materials needed include magnets, cameras, sensors, and compasses that will provide information on nearby vessels or vehicles or other obstacles or hazards. Labor costs incurred will include payments to the engineers and experts involved in the construction of the drone navigation systems. Technological costs will include acquisition costs of inertial sensors, on-board electronics (the motherboard and the navigation board), embedded software (enables Wi-Fi communications, image processing, video data sampling etc.), velocity estimators etc. The technological component ensures efficiency and reliability of the drone navigation systems. Licensing fees of VectorCal Company will form part of the indirect costs. Other indirect costs likely to be incurred by the company include management costs, insurance payments, taxes to the US government, maintenance expenses etc. (Lupashin et al., 2010). DroneIn, company will operate in the same industry as that of VectorCal Company and hence will experience similar costs to those of VectorCal. The construction of the drone navigation systems is standard and this implies that the requirements are similar regardless of the company that constructs the drone systems. However, the only notable difference that will occur will be in terms of how each company will control its costs of production or manufacturing. For both companies, raw materials like iron and steel will be necessary because these are the core metals that are used in the construction