Exercise 10-34 & 10-35 (LO 10-3, 4)

Hult Games buys electronic components for manufacturing from two suppliers, Milan Components and Dundee Parts. If the components are delivered late, the shipment to the customer is delayed. Delayed shipments lead to contractual penalties that call for Hult to reimburse a portion of the purchase price to the customer.

During the past quarter, the purchasing and delivery data for the two suppliers showed the following:

	Milan	Dundee	Total
Total Purchases (Cartons)	119000	51000	170000
Average purchase price (per carton)	20	22	20.60
Number of deliveries	80	20	100
Percentage of late deliveries	25%	10%	22%

The Accounting Department recorded $487,900 as the cost of late deliveries to customers

Required:

Assume that the average quality, measured by the percentage of late deliveries, and prices from the two companies will continue as in the past. What is the effective price for components from the two companies when late deliveries are considered? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	effective cost per carton
Milan
Dundee