I. Activity Costs Caused by Suppliers (testing failures and reordering as a result)ActivityTesting componentsReordering componentsII. Supplier DataUnit purchase priceUnits purchasedFailed testsNumber of reordersAlphaElectronics125XUnit cost:$108.02 X120,0001,50060AlphaElectronics30YCosts$1,200,000300,000$2667,100AlphaElectronics30Y7802,014.19 X40La PazCompany125X$1215,000100La PazCompany30YRequired:Determine the cost of each supplier by using ABC. Round Test and Reorder rates to the nearest dollar, and final answers to the nearest cent.AlphaElectronics125XLa PazCompany125X$2815,000100La PazCompany30Y

Activity rate= Total cost for the activity/ Cost driverThere are two activities mainly testing and…

I. Activity Costs Caused by Suppliers (testing failures and reordering as a result) Activity Testing components Reordering components II. Supplier Data Unit purchase price Units purchased Failed tests Number of reorders Required: Alpha Electronics 125X $10 120,000 1,500 60 Alpha Electronics 30Y Costs $1,200,000 300,000 $26 67,100 780 40 La Paz Company 125X $12 15,000 10 0 La Paz Company 30Y $28 15,000 10 0 Determine the cost of each supplier by using ABC. Round Test and Reorder rates to the nearest dollar, and final answers to the nearest cent.

I. Activity Costs Caused by Suppliers (testing failures and reordering as a result) Activity Testing components Reordering components II. Supplier Data Unit purchase price Units purchased Failed tests Number of reorders Required: Alpha Electronics 125X $10 120,000 1,500 60 Alpha Electronics 30Y Costs $1,200,000 300,000 $26 67,100 780 40 La Paz Company 125X $12 15,000 10 0 La Paz Company 30Y $28 15,000 10 0 Determine the cost of each supplier by using ABC. Round Test and Reorder rates to the nearest dollar, and final answers to the nearest cent.

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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9:44 .ll LTE = Chegg Supplier Costs In Order To... Jacaranda Builders is undertaking an analysis of supplier costs in order to evaluate the relative costs and performance of each supplier. They have isolated a range of activities that are consumed by suppliers, identified activity drivers, and estimated the cost per unit of activity driver for last year: Activity Cost per unit of activity driver Downtime due to poor quality material $200 per unit reworked Order material $250 per order Receive order $180 per delivery Inspect order $300 per delivery Return material to supplier $220 per return Pay supplier $190 per invoice Dispute invoiced amount $560 per dispute The three major suppliers to the company consumed the following numbers of activities: Activity Possum Timber Wombat Plumbing Emu Insulation Units reworked 10 2 Order material 40 48 30 Receive order 40 60 38 Inspect order 40 60 38 Return material to supplier 5 4 15 Pay supplier 12 48 12 Dispute invoiced amount 13 In addition, a…
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