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. Milan Dundee 175,000 75,000 $15.00 60 Total purchases (cartons) Average purchase price (per carton) Number of deliveries Total 250,000 $ 17 $15.60 40 100
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. Milan Dundee 175,000 75,000 $15.00 60 Total purchases (cartons) Average purchase price (per carton) Number of deliveries Total 250,000 $ 17 $15.60 40 100
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![[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.
Dundee Total
75,000 250,000
$ 17 $ 15.60
100
40
10%
19%
Total purchases (cartons)
Average purchase price (per carton)
Number of deliveries
Percentage of late deliveries
Milan
175,000
$15.00
60
25%
The Accounting Department recorded $717,500 as the cost of late deliveries to customers.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05c29da8-5e07-472c-a295-a56e55cdcfad%2F7fec5845-7395-44e9-83a4-25e12335f54e%2Fx7pjz5r_processed.png&w=3840&q=75)
Transcribed Image Text:[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.
Dundee Total
75,000 250,000
$ 17 $ 15.60
100
40
10%
19%
Total purchases (cartons)
Average purchase price (per carton)
Number of deliveries
Percentage of late deliveries
Milan
175,000
$15.00
60
25%
The Accounting Department recorded $717,500 as the cost of late deliveries to customers.
Transcribed Image Text: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
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