It's basically the whole thing, I barely get it and I don't have much time, so please, help me! Bowman Company manufactures cooling systems. Bowman produces all the parts necessary for its product except for one electronic component, which1. BE.05.25A.ALGOis purchased from two local suppliers: Manzer Inc. and Buckner Company. Both suppliers are reliable and seldom deliver late; however, Manzer sells the2. BE.05.26A.ALGOcomponent for $89 per unit, while Buckner sells the same component for $86. Bowman purchases 80% of its components from Buckner because of itslower price. The total annual demand is 4,000,000 components.3. BE.05.27A.ALGOTo help assess the cost effect of the two components, the following data were collected for supplier-related activities and suppliers:4. BE.05.28A.ALGOI. Activity Data5. EX.05.43.ALGOActivity CostInspecting components (sampling only)$765,0006. EX.05.47.ALGOReworking products (due to failed component)6,020,000Warranty work (due to failed component)11,870,000<) II. Supplier DataBucknerManzer Inc.CompanyUnit purchase price$89$86Units purchased800,0003,200,000Sampling hours*803,920Rework hours3605,640Warranty hours80015,200 Chapter 5 Homework Assignment (parO eBookE Print ItemRequired:1. BE.05.25A.ALGO1. Calculate the cost per component for each supplier, taking into consideration the costs of the supplier-related activities and using the current prices2. BE.05.26A.ALGOand sales volume. (Note: Round the intermediate calculations to the whole number for the following activity rates: "Reworking products" and "Warrantywork". Round the unit cost to two decimal places.)3. BE.05.27A.ALGOManzer Inc.per unit4. BE.05.28A.ALGOBuckner Companyper unit5. EX.05.43.ALGO2a. Suppose that Bowman loses $4,832,000 in sales per year because it develops a poor reputation due to defective units attributable to failedcomponents. Using warranty hours, assign the cost of lost sales to each supplier.6. EX.05.47.ALGOManzerBuckner2b. By how much would this change the cost of each supplier's component? Round your answers to the nearest cent.ManzerBuckner3. Based on the analysis in Requirements 1 and 2, discuss the importance of activity-based supplier costing for internal decision making.As with product costing, accurate assignment of costs to the cost object is essential for well-grounded decision making. Suppliers can cause a firm toperform costly activities such as inspection, rework, and warranty work. Theof a component is thus more than its purchase price.As this example shows, the component with theprice is actually less expensive because it causes less demand on internal costlyactivities. Thus, the company would likelythe purchases of the one supplier in favor of the other. It also might attempt to workwith the one supplier which is causing significant demands on internal activities to see if the quality of its component can be increased.

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Bowman Company manufactures cooling systems. Bowman produces all the parts necessary for its product except for one electronic component, which is purchased from two local suppliers: Manzer Inc. and Buckner Company. Both suppliers are reliable and seldom deliver late; however, Manzer sells the component for $89 per unit, while Buckner sells the same component for $86. Bowman purchases 80% of its components from Buckner because of its lower price. The total annual demand is 4,000,000 components. To help assess the cost effect of the two components, the following data were collected for supplier-related activities and suppliers: I. Activity Data Activity Cost Inspecting components (sampling only) $765,000 Reworking products (due to failed component) 6,020,000 Warranty work (due to failed component) 11,870,000 II. Supplier Data Buckner Manzer Inc. Company Unit purchase price $89 $86 Units purchased 800,000 3,200,000 Sampling hours" 80 3,920 Rework hours 360 5,640 Warranty hours 800 15,200

Bowman Company manufactures cooling systems. Bowman produces all the parts necessary for its product except for one electronic component, which is purchased from two local suppliers: Manzer Inc. and Buckner Company. Both suppliers are reliable and seldom deliver late; however, Manzer sells the component for $89 per unit, while Buckner sells the same component for $86. Bowman purchases 80% of its components from Buckner because of its lower price. The total annual demand is 4,000,000 components. To help assess the cost effect of the two components, the following data were collected for supplier-related activities and suppliers: I. Activity Data Activity Cost Inspecting components (sampling only) $765,000 Reworking products (due to failed component) 6,020,000 Warranty work (due to failed component) 11,870,000 II. Supplier Data Buckner Manzer Inc. Company Unit purchase price $89 $86 Units purchased 800,000 3,200,000 Sampling hours" 80 3,920 Rework hours 360 5,640 Warranty hours 800 15,200

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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