The total cost of ownership for Supplier A is $2,670,000. The total cost of ownership for Supplier B is $1,750,000. The total cost of ownership for Supplier C is $2,990,000. Using Total Cost Analysis, it will be more cost-effective to use_______.

Respuesta :

Answer:

supplier B

Explanation:

Traditional cost analysis consists of of analyzing a company's costs independently and then adding them together to determine total incurred costs. The total cost analysis reviews the total functional costs of the company as a single cost factor (large picture), not just the additional of several individual costs.

In regards to this question, supplier B offers the lowest ownership cost which can be interpreted as the lowest operational cost. Whenever a company is purchasing new equipment, it should always focus on the large picture (total cost analysis) and include into the cost equation not only the purchase cost, but also the operational costs.

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