Use the Following to Answer the Questions Below

question 20

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.Based on your Total Cost Analysis,which supplier should be selected if the lower cost supplier is chosen?

• A)Lexington Tire
• B)Irmo Auto
• C)Since the costs are the same,either supplier could be selected.
• D)More information is needed to answer this question.

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Definitions:

Journal Entry

A record in accounting that notes the debit and credit transactions affecting the financial statements of a business.

Significant Influence

A concept in accounting and finance where an investor has the power to participate in, but not control, the financial and operating policy decisions of an investee.

Investment Account

A financial account that holds securities, shares, or other investments made by an individual or entity with the objective of earning returns.

Net Income

The ultimate earnings of a company after all deductions, including expenses and taxes, from revenue.