Davis Fabricators buys metal for manufacturing from two suppliers, Alpha Metals and First Parts. If the metal
Davis Fabricators buys metal for manufacturing from two suppliers, Alpha Metals and First Parts. If the metal is delivered late, the shipment to the customer is delayed. Delayed shipments lead to contractual penalties that call for Davis to reimburse a portion of the purchase price to the customer. During the past quarter, the purchasing and delivery data for the two suppliers showed the following:
The accounting department recorded $33,600 as the cost of late deliveries to customers.
Required Assume that the average quality, measured by the percentage of late deliveries, and prices from the two companies will continue as in the past. What is the effective price for metal from the two companies when late deliveries areconsidered?
Transcribed Image Text:
Alpha First 6,000 20 Total Total purchases (tons) .10,000 Average purchase price.... 10.00 12.00 Number of deliveries. Percentage of late deliveries 16,000 10.75 80 25% 100 5% 21%
Fantastic news! We've Found the answer you've been seeking!
My self Mugdha Sisodiya from Chhattisgarh India. I have completed my Bachelors degree in 2015 and My Master in Commerce degree in 2016. I am having expertise in Management, Cost and Finance Accounts. Further I have completed my Chartered Accountant and working as a Professional.
Since 2012 I am providing home tutions.