1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate. 8.03 X +(s 8.03 Xx Purchase orders) 8.03 Xx Nonstandard orders) 2. If McGarvey Manufacturing Company estimates that next month will have 490 total purchase orders and 42 nonstandard orders, what is the total estimated purchasing cost for that month? (Round your answer to the nearest dollar.) 3. What if McGarvey Manufacturing wants to estimate purchasing cost for the coming year and expects 6,000 purchase orders and 500 nonstandard orders? What will estimated total purchasing cost be? (Round your answer to the nearest dollar.) 23,507 X What is the total fixed purchasing cost?
1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate. 8.03 X +(s 8.03 Xx Purchase orders) 8.03 Xx Nonstandard orders) 2. If McGarvey Manufacturing Company estimates that next month will have 490 total purchase orders and 42 nonstandard orders, what is the total estimated purchasing cost for that month? (Round your answer to the nearest dollar.) 3. What if McGarvey Manufacturing wants to estimate purchasing cost for the coming year and expects 6,000 purchase orders and 500 nonstandard orders? What will estimated total purchasing cost be? (Round your answer to the nearest dollar.) 23,507 X What is the total fixed purchasing cost?
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
ChapterC: Cases
Section: Chapter Questions
Problem 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...
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Question
![The controller for McGarvey Manufacturing Company felt that the number of purchase orders alone did not explain the monthly purchasing cost. He knew that nonstandard orders (for
example, one requiring an overseas supplier) took more time and effort. He collected data on the number of nonstandard orders for the past 12 months and added that information to the
data on purchasing cost and total number of purchase orders.
Month
January
February
March
May
July
August
September
October
November
December
Purchasing
Cost
Intercept
X variable 1
X variable 2
Required:
$19,250
18,050
18,200
18,050
19,345
19,500
19,670
20,940
19,430
20,020
18,800
19,340
Number of
Purchase
Orders
370
330
320
410
400
450
460
560
440
600
470
480
Number of
Nonstandard
Orders
61
40
35
73
55
30
80
51
75
12
27
Multiple regression was run on the above data; the coefficients shown by the regression program are:
14,530 (rounded to the nearest dollar)
6.30 (rounded to the nearest cent)
16.8 (rounded to the nearest cent)
1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate.
8.03 X +($ 8.03 X x Purchase orders) +
2. If McGarvey Manufacturing Company estimates that next month will have 490 total purchase orders and 42 nonstandard orders, what is the total estimated purchasing cost for that
month? (Round your answer to the nearest dollar.)
8.03 Xx Nonstandard orders)
3. What if McGarvey Manufacturing mants to estimate purchasing cost for the coming year and expects 6,000 purchase orders and 590 nonstandard orders?
What will estimated total purchasing cost be? (Round your answer to the nearest dollar.)
23,507 X
What is the total fixed purchasing cost?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb2bf0276-795f-4b1f-b4b9-d572203b8b1f%2F68403d8a-f5b1-460e-b33f-bf11a48e8549%2F3zj2vyi_processed.png&w=3840&q=75)
Transcribed Image Text:The controller for McGarvey Manufacturing Company felt that the number of purchase orders alone did not explain the monthly purchasing cost. He knew that nonstandard orders (for
example, one requiring an overseas supplier) took more time and effort. He collected data on the number of nonstandard orders for the past 12 months and added that information to the
data on purchasing cost and total number of purchase orders.
Month
January
February
March
May
July
August
September
October
November
December
Purchasing
Cost
Intercept
X variable 1
X variable 2
Required:
$19,250
18,050
18,200
18,050
19,345
19,500
19,670
20,940
19,430
20,020
18,800
19,340
Number of
Purchase
Orders
370
330
320
410
400
450
460
560
440
600
470
480
Number of
Nonstandard
Orders
61
40
35
73
55
30
80
51
75
12
27
Multiple regression was run on the above data; the coefficients shown by the regression program are:
14,530 (rounded to the nearest dollar)
6.30 (rounded to the nearest cent)
16.8 (rounded to the nearest cent)
1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate.
8.03 X +($ 8.03 X x Purchase orders) +
2. If McGarvey Manufacturing Company estimates that next month will have 490 total purchase orders and 42 nonstandard orders, what is the total estimated purchasing cost for that
month? (Round your answer to the nearest dollar.)
8.03 Xx Nonstandard orders)
3. What if McGarvey Manufacturing mants to estimate purchasing cost for the coming year and expects 6,000 purchase orders and 590 nonstandard orders?
What will estimated total purchasing cost be? (Round your answer to the nearest dollar.)
23,507 X
What is the total fixed purchasing cost?
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