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. Total purchases (tons) Plastic discarded Таppan 4,400 110 Hill 8,200 410 The purchasing manager has just received bids on an order for 150 tons of plastic from both Tappan and Hill. Tappan bid $1,482 and Hill bid $1,463 per ton.
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. Total purchases (tons) Plastic discarded Таppan 4,400 110 Hill 8,200 410 The purchasing manager has just received bids on an order for 150 tons of plastic from both Tappan and Hill. Tappan bid $1,482 and Hill bid $1,463 per ton.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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.
Hill
Total purchases (tons)
Plastic discarded
Таppan
4,400
110
8,200
410
The purchasing manager has just received bids on an order for 150 tons of plastic from both Tappan and Hill. Tappan
bid $1,482 and Hill bid $1,463 per ton.
Transcribed Image Text: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? (Do not round intermediate calculations.)
Таppan
Hill
Effective cost per ton
1-b. Which supplier would you recommend that the purchasing manager select?
Таppan
O Hill
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