Homework Help is Here – Start Your Trial Now!
Business
Accounting
1. Quotation from Avco at Specific Quantities 1 unit @ $85 each 3 units @ $80 each 6 units @ $70 each 10 units @ $69 each 2. Instructions Line 1: Place specific quantities from the quotation on line 1 in the appropriate column. Each column represents a specific quantity. Assume that ordering 0 is an option. This will support the quantity discount calculation. Line 2: Place the quoted price from the supplier for each specific quantity on line 2 in the appropriate column. Line 3: Multiply line 1 by line 2 for each column to arrive at a total price per order. Line 4: Take the difference between the total price per order (line 3) and each successive order. For column A, it is the difference between $85 and ordering zero pieces, or $0.00. For column B, it is the difference between column B/line 3 and column A/ line 3, or $240 – $85 = $155. Line 5: This is the difference between each quantity break specified on line 1. Line 6: This equals line 4 divided by line 5 for each column. 3. Price Breaks at Specific Quantities Supplier Avco Part Name & No. Compressor 04273999 Date 10/24/07 A B D E F G H 1. Number of units per order 1 3 6 10 2. Price per unit (quoted price) 85 80 70 69 3. Total price per order 85 240 420 690 4. Price difference between orders 85 155 180 270 5. Quantity difference between orders 1 2 3 4 6. Price per unit per order quantity difference $85 $77.50 $60 $67.50 4. Quantity Discount Analysis QUANTITY TOTAL COST INCREMENTAL QUANTITY INCREMENTAL COST 1 $85 1 $85 2 3 $77.50 $77.50 3 $240 $60 $60 $60 4 6 $420 6 $67.50 $67.50 $67.50 $67.50 8 9 10 $690 10

1. Quotation from Avco at Specific Quantities 1 unit @ $85 each 3 units @ $80 each 6 units @ $70 each 10 units @ $69 each 2. Instructions Line 1: Place specific quantities from the quotation on line 1 in the appropriate column. Each column represents a specific quantity. Assume that ordering 0 is an option. This will support the quantity discount calculation. Line 2: Place the quoted price from the supplier for each specific quantity on line 2 in the appropriate column. Line 3: Multiply line 1 by line 2 for each column to arrive at a total price per order. Line 4: Take the difference between the total price per order (line 3) and each successive order. For column A, it is the difference between $85 and ordering zero pieces, or $0.00. For column B, it is the difference between column B/line 3 and column A/ line 3, or $240 – $85 = $155. Line 5: This is the difference between each quantity break specified on line 1. Line 6: This equals line 4 divided by line 5 for each column. 3. Price Breaks at Specific Quantities Supplier Avco Part Name & No. Compressor 04273999 Date 10/24/07 A B D E F G H 1. Number of units per order 1 3 6 10 2. Price per unit (quoted price) 85 80 70 69 3. Total price per order 85 240 420 690 4. Price difference between orders 85 155 180 270 5. Quantity difference between orders 1 2 3 4 6. Price per unit per order quantity difference $85 $77.50 $60 $67.50 4. Quantity Discount Analysis QUANTITY TOTAL COST INCREMENTAL QUANTITY INCREMENTAL COST 1 $85 1 $85 2 3 $77.50 $77.50 3 $240 $60 $60 $60 4 6 $420 6 $67.50 $67.50 $67.50 $67.50 8 9 10 $690 10

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Examine exhibit 12.8, what conclusions about the AVCO quote can you draw from the data? Are you able to make a buy decision?

**Exhibit 12.8: Quantity Discount Analysis (Price Breaks at Specific Quantities)** ### 1. Quotation from Avco at Specific Quantities - **1 unit** @ $85 each - **3 units** @ $80 each - **6 units** @ $70 each - **10 units** @ $69 each ### 2. Instructions - **Line 1**: Place specific quantities from the quotation on line 1 in the appropriate column. Each column represents a specific quantity. Assume that ordering 0 is an option. This will support the quantity discount calculation. - **Line 2**: Place the quoted price from the supplier for each specific quantity on line 2 in the appropriate column. - **Line 3**: Multiply line 1 by line 2 for each column to arrive at a total price per order. - **Line 4**: Take the difference between the total price per order (line 3) and each successive order. For column A, it is the difference between $85 and ordering zero pieces, or $0.00. For column B, it is the difference between column B/line 3 and column A/line 3, or $240 - $85 = $155. - **Line 5**: This is the difference between each quantity break specified on line 1. - **Line 6**: This equals line 4 divided by line 5 for each column. ### 3. Price Breaks at Specific Quantities | Supplier | Avco | Part Name & No. | Compressor 04273999 | Date 10/24/07 | |----------|-----------------------|------------------|---------------------|---------------| | | **A** | **B** | **C** | **D** | **E** | **F** | **G** | **H** | | **1. Number of units per order** | 0 | 1 | 3 | 6 | 10 | | | | | **2. Price per unit (quoted price)** | 0 | 85 | 80 | 70 | 69 | | | | | **3. Total price per order** | 0 | 85 | 240 | 420 | 690 | | | | | **4. Price difference between orders** | 85 | 155 | 180 |
Transcribed Image Text:**Exhibit 12.8: Quantity Discount Analysis (Price Breaks at Specific Quantities)** ### 1. Quotation from Avco at Specific Quantities - **1 unit** @ $85 each - **3 units** @ $80 each - **6 units** @ $70 each - **10 units** @ $69 each ### 2. Instructions - **Line 1**: Place specific quantities from the quotation on line 1 in the appropriate column. Each column represents a specific quantity. Assume that ordering 0 is an option. This will support the quantity discount calculation. - **Line 2**: Place the quoted price from the supplier for each specific quantity on line 2 in the appropriate column. - **Line 3**: Multiply line 1 by line 2 for each column to arrive at a total price per order. - **Line 4**: Take the difference between the total price per order (line 3) and each successive order. For column A, it is the difference between $85 and ordering zero pieces, or $0.00. For column B, it is the difference between column B/line 3 and column A/line 3, or $240 - $85 = $155. - **Line 5**: This is the difference between each quantity break specified on line 1. - **Line 6**: This equals line 4 divided by line 5 for each column. ### 3. Price Breaks at Specific Quantities | Supplier | Avco | Part Name & No. | Compressor 04273999 | Date 10/24/07 | |----------|-----------------------|------------------|---------------------|---------------| | | **A** | **B** | **C** | **D** | **E** | **F** | **G** | **H** | | **1. Number of units per order** | 0 | 1 | 3 | 6 | 10 | | | | | **2. Price per unit (quoted price)** | 0 | 85 | 80 | 70 | 69 | | | | | **3. Total price per order** | 0 | 85 | 240 | 420 | 690 | | | | | **4. Price difference between orders** | 85 | 155 | 180 |
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Stock Market Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS