Ellery Products manufactures various components for the fashion industry. Ellery buys fabric from two vendors: Ewers Textiles and Bramford Materials. Ellery chooses the vendor based on price. Once the fabric is received, it is inspected to ensure that it is suitable for manufacturing purposes. Ellery disposes of fabric that is deemed unsuitable.

The controller at Ellery collected the following information on purchases for the past quarter:

	Ewers	Bramford
Total purchases (yards)	19,800	36,900
Fabric discarded (yards)	990	4,428

The purchasing manager has just received bids on an order for 800 yards of fabric from both Ewers and Bramford. Ewers bid $2,261 and Bramford bid $2,134.

Required:

1-a. Assume that the average quality, measured by the amounts discarded from the two companies, will continue as in the past. What is the effective cost per 800 yards for both Ewers and Bramford?

1-b. Which supplier would you recommend that the purchasing manager select?

Required A

Required B

Assume that the average quality, measured by the amounts discarded from the two companies, will continue as in the past. What is the effective cost per 800 yards for both Ewers and Bramford?

	Ewers	Bramford
Effective cost per 800 yards