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) 6,000 10,000 Plastic discarded 120 600 The purchasing manager has just received bids on an order for 290 tons of plastic from both Tappan and Hill. Tappan bid $1,813 and Hill bid $1,786 per ton. Required: 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 (Do not round intermediate calculations.)
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) 6,000 10,000
Plastic discarded 120 600
The purchasing manager has just received bids on an order for 290 tons of plastic from both Tappan and Hill. Tappan bid $1,813 and Hill bid $1,786 per ton.
Required:
- 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 (Do not round intermediate calculations.)
Tappan Hill
Effective cost per ton _______ ____
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