Russell Company uses Beltran Company and Southern Express Inc. to buy the electronic chip used in the manufacturing of its GPS device. Russell Co. has been using these two companies for several years and would like to cut down to only one supplier to purchase the 1,200,000 chips needed per year. In order to determine which supplier is the most cost effective Russell Co. compiled the following data:
Required:
A. Calculate the activity rate for each activity. Round your answer to two decimal places.
B. Calculate the cost per chip for each supplier.
C. Which supplier should Russell Company choose?

Question

Russell Company uses Beltran Company and Southern Express Inc. to buy the electronic chip used in the manufacturing of its GPS device. Russell Co. has been using these two companies for several years and would like to cut down to only one supplier to purchase the 1,200,000 chips needed per year. In order to determine which supplier is the most cost effective Russell Co. compiled the following data:
  Required:
A. Calculate the activity rate for each activity. Round your answer to two decimal places.
B. Calculate the cost per chip for each supplier.
C. Which supplier should Russell Company choose?

Quizplus · Accepted Answer

The Answer of Russell Company uses Beltran Company and Southern Express Inc. to buy the electronic chip used in the manufacturing of its GPS device. Russell Co. has been using these two companies for several years and would like to cut down to only one supplier to purchase the 1,200,000 chips needed per year. In order to determine which supplier is the most cost effective Russell Co. compiled the following data:
  Required:
A. Calculate the activity rate for each activity. Round your answer to two decimal places.
B. Calculate the cost per chip for each supplier.
C. Which supplier should Russell Company choose?

Russell Company Uses Beltran Company and Southern Express Inc