Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Required information [The following information applies to the questions displayed below.] Hult Games buys electronic components for manufacturing from two suppliers, Milan Components and
Required information [The following information applies to the questions displayed below.] 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. Total purchases (cartons) Milan 119,000 Dundee 51,000 Total 170,000 Average purchase price (per carton) $ 20.00 $ 22 Number of deliveries Percentage of late deliveries 80 25% 20 10% $ 20.60 100 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.) Milan Dundee Effective Cost Per Carton
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started