(LO 10-3 10-61. Activity-Based Costing of Suppliers Consider the information in Problem 10-60. The sales manager of Red Oak Chemicals has pro- posed to the purchasing manager at JFI that Red Oak be given an exclusive contract to supply the feedstock. If it receives the contract, Red Oak will guarantee an 80 percent yield on the feedstock it supplies. Required Assume that the average quality, measured by the yield, and prices from the two companies will continue as in the past. What is the maximum price for feedstock that JFI should be will- ing to pay Red Oak under the exclusive contract? b. Are there other factors that JFI should consider before accepting the offer? a. (LO 10-3 10-61. Activity-Based Costing of Suppliers Consider the information in Problem 10-60. The sales manager of Red Oak Chemicals has pro- posed to the purchasing manager at JFI that Red Oak be given an exclusive contract to supply the feedstock. If it receives the contract, Red Oak will guarantee an 80 percent yield on the feedstock it supplies. Required Assume that the average quality, measured by the yield, and prices from the two companies will continue as in the past. What is the maximum price for feedstock that JFI should be will- ing to pay Red Oak under the exclusive contract? b. Are there other factors that JFI should consider before accepting the offer? a