Problem 10-72 (Static) Activity-Based Costing of Suppliers (LO 10-3, 4) Carrie Construction (CC) is a company spedisizing in bullding alport runways and mejor highways. As a port of its business, it receives supplies of aggegate (ntone; sand, grevel, and so on) from two suppliers Austin Aggregate and Granger Materials. The CC purchasing department hat a preference for biging from Granger based on price but occasionally has to order trom Austin when Grange; cannot fil the ordet Carmie Censtruction has recenty had problems wth the qualty and the timeliness of deliveries. When a supplier delivers a load to CC. it goes through an initial inspection to ossure it meets specification. If the lood fails the incial inspection. a goes through a secondary inspection to determine the expct issue. Amost alwsys, the issue can be resolved and the load can be used. The initial inspection costs $3,000 per losd. A secondary inspection, which is more thorough, costs $15,000 per load, if a delivery is delayed, Carne has to hire temporay workers or pay overime to some employees. The averape cost of a detsyed load is $6,000. The folowing are summary statitics from last years purchases from the two suppliers The sales manager of Granger Materlals has proposed to the purchasing manager at Carrie Construction that Granger be gven an exclusive contract to supply the apgregate. Assume that the total annusi demand remains the same. If it recelves the controct, Granget Will deliver the aggrogate in the same tverage-sized lond as i does currently Recialred: a. Ir Granger receives the exchisive contract, assume the load qualify and delivery timeliness will remain the same as current experience. What is the masimum price Camie Construction should offer Granger Materials for the exclusive contract? Note: Do not round intermediate calculations. Alound your final answer to 2 decimal places. b. Suppose Granger Materlals guarantees that no delveries will be delayed or it will repay Camie Construction for the costs associated With the delay. What is the maximum price Carme Construction should offer Granger Materials for the exclushe contract? Note: Do not round intermedlate calculations. Round your final answer to 2 decimal places. Problem 10-72 (Static) Activity-Based Costing of Suppliers (LO 10-3, 4) Carrie Construction (CC) is a company spedisizing in bullding alport runways and mejor highways. As a port of its business, it receives supplies of aggegate (ntone; sand, grevel, and so on) from two suppliers Austin Aggregate and Granger Materials. The CC purchasing department hat a preference for biging from Granger based on price but occasionally has to order trom Austin when Grange; cannot fil the ordet Carmie Censtruction has recenty had problems wth the qualty and the timeliness of deliveries. When a supplier delivers a load to CC. it goes through an initial inspection to ossure it meets specification. If the lood fails the incial inspection. a goes through a secondary inspection to determine the expct issue. Amost alwsys, the issue can be resolved and the load can be used. The initial inspection costs $3,000 per losd. A secondary inspection, which is more thorough, costs $15,000 per load, if a delivery is delayed, Carne has to hire temporay workers or pay overime to some employees. The averape cost of a detsyed load is $6,000. The folowing are summary statitics from last years purchases from the two suppliers The sales manager of Granger Materlals has proposed to the purchasing manager at Carrie Construction that Granger be gven an exclusive contract to supply the apgregate. Assume that the total annusi demand remains the same. If it recelves the controct, Granget Will deliver the aggrogate in the same tverage-sized lond as i does currently Recialred: a. Ir Granger receives the exchisive contract, assume the load qualify and delivery timeliness will remain the same as current experience. What is the masimum price Camie Construction should offer Granger Materials for the exclusive contract? Note: Do not round intermediate calculations. Alound your final answer to 2 decimal places. b. Suppose Granger Materlals guarantees that no delveries will be delayed or it will repay Camie Construction for the costs associated With the delay. What is the maximum price Carme Construction should offer Granger Materials for the exclushe contract? Note: Do not round intermedlate calculations. Round your final answer to 2 decimal places
