5th Edition

ISBN: 9781259565403

Author: William N. Lanen Professor, Shannon Anderson Associate Professor, Michael W Maher

Publisher: McGraw-Hill Education

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Chapter 10, Problem 36E

Activity-Based Costing of Suppliers

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:

Chapter 10, Problem 36E, Activity-Based Costing of Suppliers Kinnear Plastics manufactures various components for the

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.

Required

Assume that the average quality, measured by the amounts discarded from the two companies, will continue as in the past. Which supplier would you recommend that the purchasing manager select? Explain.

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Chapter 10, Problem 35E

Chapter 10, Problem 37E

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Chapter 10 Solutions

Fundamentals of Cost Accounting

Ch. 10 - How are activity-based costing and activity-based...Ch. 10 - Can activity-based management be implemented...Ch. 10 - Prob. 3RQ Ch. 10 - What are some ways in which customers affect a...Ch. 10 - How is computing the cost of customers the same as...Ch. 10 - Prob. 6RQ Ch. 10 - Prob. 7RQ Ch. 10 - Under what conditions should the cost of excess...Ch. 10 - In what ways does quality affect cost?Ch. 10 - What are the four categories in a cost of quality...

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