Required information [The following information applies to the questions displayed below.] Bid 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 Tappan 5,000 200 Hill 7,500 375 The purchasing manager has just received bids on an order for 330 tons of plastic from both Tappan and Hill. Tappan bid $2,112 and Hill bid $2,109 per ton. Required: a. Assume all else remains the same. What bid by Tappan would make Kinnear indifferent between buying from Tappan or Hill? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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[The following information applies to the questions displayed below.]
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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
Tappan
5,000
200
Hill
7,500
375
The purchasing manager has just received bids on an order for 330 tons of plastic from both Tappan and Hill. Tappan bid
$2,112 and Hill bid $2,109 per ton.
Required:
a. Assume all else remains the same. What bid by Tappan would make Kinnear indifferent between buying from Tappan or Hill? (Do
not round intermediate calculations. Round your answer to 2 decimal places.)
Transcribed Image Text:! Required information [The following information applies to the questions displayed below.] Bid 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 Tappan 5,000 200 Hill 7,500 375 The purchasing manager has just received bids on an order for 330 tons of plastic from both Tappan and Hill. Tappan bid $2,112 and Hill bid $2,109 per ton. Required: a. Assume all else remains the same. What bid by Tappan would make Kinnear indifferent between buying from Tappan or Hill? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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