Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The co uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for t year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,050 Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which yo to reimburse the supplier. Your assistant has obtained quotes from two reliable engine suppliers and you need to decide whi The following data have been collected Requirements (annual forecast) weight per engine Order processing cost Inventory carry cost 12,600 units 25 pounds 165 per order 20 percent of the average value of inventory per year
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
![Your assistant has obtained the following freight rates from your carrier:
Truckload (53,e00 lbs. each load):
Less-than-truckload:
$0.80 per ton-mile
$1.20 per ton-mile
Note: Per ton-mile = 2,000 lbs. per mile.
a-1. Calculate the total cost for each supplier. (Round your answers to the nearest whole number.)
Supplier 1
Supplier 2
Total cost
6,838,020S
6.804,740](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d5c8c92-5a65-47bc-9859-d57ea08ed644%2Fe1670a58-833b-4dda-a33f-a040b3554122%2Ft02cg3b_processed.jpeg&w=3840&q=75)
![Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company
uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for the coming
year. Due to the size of your warehouse and other administrative restrictions, you must order the engines in lot sizes of 1,050 units.
Because of the unique characteristics of the engine, special tooling is needed during the manufacturing process for which you agree
to reimburse the supplier. Your assistant has obtained quotes from two reliable engine suppliers and you need to decide which to use.
The following data have been collected
Requirements (annual forecast)
Weight per engine
Order processing cost
Inventory carry cost
12,600 units
25 pounds
165 per order
20 percent of the average value of inventory per year
Note: Assume that half of lot size is in inventory on average (1.050/2 = 525 units).
Two qualified suppliers have submitted the following quotations:
SUPPLIER 1 SUPPLIER 2
UNIT PRICE
ORDER QUANTITY
1 to 1,499 units/order
1,500 to 2,099 units/order
3,000 + units/order
Tooling costs
Distance
UNIT PRICE
24
534
532
532
S30
529
526
$27,000
130 miles
$24,800
100 miles
Your assistant has obtained the following freight rates from your carrier](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d5c8c92-5a65-47bc-9859-d57ea08ed644%2Fe1670a58-833b-4dda-a33f-a040b3554122%2Fu6jt7k_processed.jpeg&w=3840&q=75)
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