Use the Following to Answer the Questions Below

question 118

Multiple Choice

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 savings available when comparing the two suppliers?

• A)$25,000
• B)$150,000
• C)$725,000
• D)$3,000

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Definitions:

Normal Time

The standard time that a task or operation should take under normal working conditions, used in planning and scheduling.

Standard Time

The amount of time prescribed for the completion of a job or task, based on average speed and efficiency under normal conditions.

Variable Allowance

An allowance or adjustment made for changes in costs or expenses that may vary over time, often used in budgeting and pricing.

Allowance Factor

A factor used to calculate the amount of material needed considering waste or inefficiency, often in manufacturing or budgeting.