Karrie Industrial Products has a major assembly plant for flow valves in Calgary. The main components it
Question:
Karrie Industrial Products has a major assembly plant for flow valves in Calgary. The main components it purchases are the digital controllers for these flow valves. Karrie recently signed a contract with a low-cost manufacturer in Mexico City to produce the controllers used in their assembly operation. Annual requirements are 9,000 digital controllers. The annual holding cost rate for this type of item has been estimated at 10% per year of cost, and the cost of each controller is $750. The procurement manager is considering two modes of transportation to bring these items from Mexico City to Calgary. The following data are available for the two modes. (Year=365 days) Calculate the annual shipping cost for the truck option. $152,000.00 $242,000.00 $252,000.00 $262,000.00
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young