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 Total Total purchases (cartons) 98,000 42,000 140,000 Average purchase price (per carton) $ 20.00 $ 22 $ 20.60 Number of deliveries 80 20 100 Percentage of late deliveries 25% 10% 22% The Accounting Department recorded $602,700 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 form the two companies when late deliveries are considered? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Effective Cost Per Carton Milan ____________ Dundee ____________
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 Total
Total purchases (cartons) 98,000 42,000 140,000
Average purchase price (per carton) $ 20.00 $ 22 $ 20.60
Number of deliveries 80 20 100
Percentage of late deliveries 25% 10% 22%
The Accounting Department recorded $602,700 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 form the two companies when late deliveries are considered? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Effective Cost
Per Carton
Milan ____________
Dundee ____________
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