Question

Banta Company must choose between options A, B and C. Evaluate the three options and determine which one is in the best interest of Banta Company. Write a brief paragraph to explain your reasoning. The options differ as follows: Option A uses moderately priced materials from a supplier that usually has the quantities needed by Banta. Option B uses high quality materials that are readily available from a local supplier. Labor and manufacturing costs can be reduced slightly since fewer items fail quality tests during production. Option C uses slight significantly less expensive materials from a local supplier. These lower quality materials result in higher labor and manufacturing overhead costs

Answer 1

It is better to choose option A for banta company. In option A uses moderately priced materials from the supplier that usually has the quantity needed by banta. Option B uses high quality materials so it's price also high. so material cost will be Very high. so it is not good for banta company. option C uses low quality materials. So it will lead to higher labor and manufacturing overhead. So this option also not good. comparatively better option is A. It uses moderate quality materials. So the material cost will be moderate and labor and overhead cost also less.