Kinnear Plastics manufactures various components for the aircraft and marine industry. Kinnear buys plastic from two vendors: Tappan Corporation and Hill Enterprises. Kinnear chooses the vendor based on price. Once the plastic is received, it is inspected to ensure that it is suitable for production. Plastic that is deemed unsuitable is disposed of. The controller at Kinnear collected the following information on purchases for the past year: Tappan Hill Total purchases (tons) 4,500 7,500 Plastic discarded 135 375 The purchasing manager has just received bids on an order for 170 tons of plastic from both Tappan and Hill. Tappan bid $1,358 and Hill bid $1,349 per ton. 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 ton for both Tappan and Hill

Question

Mathematics

Jared Underwood

30 January, 15:18

Kinnear Plastics manufactures various components for the aircraft and marine industry. Kinnear buys plastic from two vendors: Tappan Corporation and Hill Enterprises. Kinnear chooses the vendor based on price. Once the plastic is received, it is inspected to ensure that it is suitable for production. Plastic that is deemed unsuitable is disposed of. The controller at Kinnear collected the following information on purchases for the past year: Tappan Hill Total purchases (tons) 4,500 7,500 Plastic discarded 135 375 The purchasing manager has just received bids on an order for 170 tons of plastic from both Tappan and Hill. Tappan bid $1,358 and Hill bid $1,349 per ton. 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 ton for both Tappan and Hill

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Answers (1)

Know the Answer?

Ariel Ferguson · Answer 1

Tappan is $1400

Hill is $1420

Step-by-step explanation:

Particulars Tappan Hill

Tons purchased 4500 7500

Tons discarded 135 375

% plastic discarded 3% 5%

% plastic accepted for 97% 95%

Quoted price 1358 1349

% accepted for 97% 95%

Effective cost per ton

= Quoted price / % accepted for

$ 1400 $1420

Effective cost per ton

Tappan Hill

$1400 $1420