Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Carrie Construction (CC) is a company specializing in building airport runways and major highways. As a part of its business, it receives supplies of aggregate

image text in transcribed Carrie Construction (CC) is a company specializing in building airport runways and major highways. As a part of its business, it receives supplies of aggregate (stone, sand, gravel, and so on) from two suppliers: Austin Aggregate and Granger Materials. The CC purchasing department has a preference for buying from Granger based on price but occasionally has to order from Austin when Granger cannot fill the order. Carrie Construction has recently had problems with the quality and the timeliness of deliveries. When a supplier delivers a load to CC, it goes through an initial inspection to assure it meets specification. If the load fails the initial inspection, it goes through a secondary inspection to determine the exact issue. Almost always, the issue can be resolved and the load can be used. The initial inspection costs $3,135 per load. A secondary inspection, which is more thorough, costs $15,675 per load. If a delivery is delayed, Carrie has to hire temporary workers or pay overtime to some employees. The average cost of a delayed load is $6,270. The following are summary statistics from last year's purchases from the two suppliers: Calculate the effective cost of a ton of aggregate from the two suppliers, assuming that last year's experience is representative. Note: Round "Average effective cost per ton" answers to 2 decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions