Compute the annual after-tax cost of borrowing and calculate after-tax cost of borrowing percentage of Company SB.

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Chapter 10, Problem 7DQ

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Compute the annual after-tax cost of borrowing and calculate after-tax cost of borrowing percentage of Company SB.

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Mason Manufacturing is preparing its annual profit plan. As part of its cost analysis, management estimates that $150,000 in purchasing support costs should be allocated to individual suppliers based on the number of shipments received. The company has two major suppliers: • Supplier X received 35 shipments during the year. Supplier Y received 105 shipments during the year. Compute the amount of purchasing costs allocated to Supplier Y, assuming Mason Manufacturing uses number of shipments received to allocate costs. a) $30,000 b) $45,000 c) $90,000 d) $112,500