material costing problem

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Varun Jain (Querist)
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19 April 2010 solve this question

Question: After inviting tenders, two quotations are received as under:
Supplier A- Rs. 2.20 per unit.
Supplier B- Rs. 2.10 per unit + Rs. 2,000 fixed charges irrespective of units ordered.

(i) Calculate the order quantity for which the purchase price per unit will be the same.
(ii) Select the supplier if the purchase officer wants to place an order for 15,000 units.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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19 April 2010 (I) ANS:-

ORDER QUANTITY FOR WHICH PURCHASE COST WILL BE SAME= 2000/(2.20-2.10)=20000 UNITS.

SUP A=(20000*2.20)=RS44000
SUP B=(20000*2.10)+2000=RS.44000

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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19 April 2010 (II) ANS:-

AT 15000 ORDER QTY;-
SUP A=(15000*2.20)=RS 33000/-
SUP B=(15000*2.10)+2000=RS 33500/-

SUP A WILL BE SELECTED.

NOTE:- FOR ORDERINGS ANY QTY BELOW 20000 UNIT SUP A IS BEST ABOVE 20000 UNIT SUP B IS BEST.

Varun Jain

Varun Jain (Querist)
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19 April 2010 Thanks for answer

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