FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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
3,500
105
The purchasing manager has just received bids on an order for 240 tons of plastic from both Tappan and Hill. Tappan bid
$1,940 and Hill bid $1,938 per ton.
Effective cost per ton
Hill
6,500
325
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.)
Tappan Hill
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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: Total purchases (tons) Plastic discarded Tappan 3,500 105 The purchasing manager has just received bids on an order for 240 tons of plastic from both Tappan and Hill. Tappan bid $1,940 and Hill bid $1,938 per ton. Effective cost per ton Hill 6,500 325 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.) Tappan Hill
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