Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Algonac Moldings produces a product made from a metal alloy. Two suppliers, Liebold Metal and Cecil Distributors, supply the alloy. Neither supplier can meet Algonac's

Algonac Moldings produces a product made from a metal alloy. Two suppliers, Liebold Metal and Cecil Distributors, supply the alloy. Neither supplier can meet Algonac's typical demand, because of capacity constraints. The material from Liebold is less expensive to buy but more difficult to use, resulting in greater waste. The metal alloy is highly toxic and any waste requires costly handling to avoid environmental accidents. Last year the cost of handling the waste totaled $2,572,307. Additional data from last year’s operations are shown as follows:


Liebold MetalsCecil Distributors
Amount of material purchased (tons)72.8123.2
Amount of waste (tons)13.015.0
Cost of purchases$ 3,189,660$ 7,099,566

Required:

a. Allocate the cost of the waste handling to the two suppliers based on:

1. Amount of material purchased.

2. Amount of waste.

3. Cost of material purchased.

Step by Step Solution

3.42 Rating (165 Votes )

There are 3 Steps involved in it

Step: 1

a Allocation of cost of waste handling to the two suppliers Amount of material purchased Liebold Met... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Cost Accounting

Authors: William Lanen, Shannon Anderson, Michael Maher

3rd Edition

9780078025525, 9780077517359, 77517350, 978-0077398194

More Books

Students also viewed these Accounting questions

Question

In your own words describe the purpose of the ACFE.

Answered: 1 week ago

Question

nvm

Answered: 1 week ago