Use the following to answer the questions below.
The Burdell Wheel and Tire Company assembles tires to wheel rims for use on cars during manufacture of vehicles by the automotive industry.Burdell wants to locate a low-cost supplier for the tires he uses in his assembly operation.The supplier will be selected based on total annual cost to supply Burdell's needs.Burdell's annual requirements are for 25,000 tires,and the company operates 250 days a year.The following data are available for two suppliers being considered.

-Refer to the instruction above.What are the annual material costs for Lexington Tire?
A)$60,000
B)$750,000
C)$725,000
D)$3,000

Question

Use the following to answer the questions below.
The Burdell Wheel and Tire Company assembles tires to wheel rims for use on cars during manufacture of vehicles by the automotive industry.Burdell wants to locate a low-cost supplier for the tires he uses in his assembly operation.The supplier will be selected based on total annual cost to supply Burdell's needs.Burdell's annual requirements are for 25,000 tires,and the company operates 250 days a year.The following data are available for two suppliers being considered.
 
-Refer to the instruction above.What are the annual material costs for Lexington Tire?
A)$60,000 
B)$750,000 
C)$725,000 
D)$3,000

Quizplus · Accepted Answer

To find the annual material cost for Lexington Tire, we need to multiply the cost per tire ($25) by the number of tires required annually (25,000). So, the annual material cost for Lexington Tire would be 25,000 x $25 = $625,000. Therefore, the best choice would be to select Lexington Tire as it has the lowest total annual cost.

Use the Following to Answer the Questions Below