Orvande must deliver, at a fixed price of 800,000, components for which the contract provides no way out. Costs still to be incurred: incremental costs 640,000; share of the depreciation of the press used 120,000; share of the depreciation of moulds shared with other contracts 95,000; share of general administrative overheads 50,000. The shares result from the keys chosen by Orvande (case data). Compute the cost of fulfilling and the provision (no impairment of the equipment).
- Fixed contract price
- 800,000
- Incremental costs still to be incurred
- 640,000
- Share of the depreciation of the press
- 120,000
- Share of the depreciation of the moulds
- 95,000
- Share of general administrative overheads
- 50,000