Maverick Inc. Is deciding on which suppller to choose for one of Its components, Suppliers have similar quallty but varying costs when It comes to ordering costs, commissions, and variable costs per unit. Maverlck Is equally Wikely to order 1000, 1200, 1400, or 1600 components this year. Orders come in a size of 100 components per order, so there will be multiple orders each year. Commissions are charged on the total purchase cost (i.e., order cost + varlable costs). Maverick has narrowed the choices to four possible suppliers with the following cost information: Cost per order $100.0 $125.0 $T10.0 $105.0 elow is an incomplete payoff table: Cost per unitCommissions $10.00 $9.00 $7.00 $8.00 Witmore Ltd. 2.0% 2.0% 3.0% 2.5% Locke Ltd. Shepherd Ltd. Bushel Inc. Units Ordered 1,400 D. 1,000 1,200 1,800 upplier $13.464.00 $17,952 00 Witmore Ltd. Locke Ltd. $10,455.00 $14,637.00 S10.011 60 $11 680 20
Maverick Inc. Is deciding on which suppller to choose for one of Its components, Suppliers have similar quallty but varying costs when It comes to ordering costs, commissions, and variable costs per unit. Maverlck Is equally Wikely to order 1000, 1200, 1400, or 1600 components this year. Orders come in a size of 100 components per order, so there will be multiple orders each year. Commissions are charged on the total purchase cost (i.e., order cost + varlable costs). Maverick has narrowed the choices to four possible suppliers with the following cost information: Cost per order $100.0 $125.0 $T10.0 $105.0 elow is an incomplete payoff table: Cost per unitCommissions $10.00 $9.00 $7.00 $8.00 Witmore Ltd. 2.0% 2.0% 3.0% 2.5% Locke Ltd. Shepherd Ltd. Bushel Inc. Units Ordered 1,400 D. 1,000 1,200 1,800 upplier $13.464.00 $17,952 00 Witmore Ltd. Locke Ltd. $10,455.00 $14,637.00 S10.011 60 $11 680 20
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...
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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.
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Transcribed Image Text:Maverick Inc, Is deciding on which supplier to choose for one of Its components,
Suppliers have similar quallty but varying costs when It comes to ordering costs,
commissions, and variable costs per unit. Maverick is equally Wikely to order 1000,
1200, 1400, or 1600 components this year, Orders come in a size of 100
components per order, so there will be multiple orders each year. Commissions are
charged on the total purchase cost (i.e., order cost + varlable costs). Maverick has
narrowed the choices to four possible suppliers with the following cost information:
Cost per order
$100.0
$125.0
$T10.0
$105.0
Cost per unit Commissions
$10.00
$9.00
$7.00
$8.00
Witmore Ltd,
Locke Ltd.
2.0%
2.0%
3.0%
2.5%
Shepherd Ltd.
Bushel Inc.
Below is an incomplete payoff table:
Units Ordered
1,600
$17,952.00
1,200
1,000
1,400
D.
Supplier
Witmore Ltd.
$13,464.00
$14,637.00
$11,680.20
Locke Ltd.
$10,455.00
F
$10,011.60
$11,131.50
G.
Shepherd Ltd.
Bushel Inc.
$9,276.25
$14,842.00
In the box below, enter the calculated payoff for "E"
Round to the nearest whole number. DO NOT include decimals or commas
Your Answer:
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