Algonac Moldings produces a product made from a metal alloy. Two suppliers, Liebold Metal and Cecil Distributors, supply the alloy. Neither supplier can meet Algonac's typical demand, because of capacity constraints. The material from Liebold is less expensive to buy but more difficult to use, resulting in greater waste. The metal alloy is highly toxic and any waste requires costly handling to avoid environmental accidents. Last year the cost of handling the waste totaled $2,572,307. Additional data from last year’s operations are shown as follows:

	Liebold Metals	Cecil Distributors
Amount of material purchased (tons)	72.8	123.2
Amount of waste (tons)	13.0	15.0
Cost of purchases	$ 3,189,660	$ 7,099,566

Required:

a. Allocate the cost of the waste handling to the two suppliers based on:

1. Amount of material purchased.

2. Amount of waste.

3. Cost of material purchased.

Answer rating: 100% (QA)

a Allocation of cost of waste handling to the two suppliers Amount of material purchased Liebold Met... View the full answer