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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Accounting Evman Company has decided to introduce a new product, which can be manufactured by either a computer-assisted manufacturing system or a labour-intensive production system. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows: computer-assisted manufacturing system labour-intensive production system Direct Material $5.00 $5.60 Direct Labour .5DLH @ $12 $6.00 .8 DLH @ $9 $7.20 Variable Overhead .5 DLH @ $6 $3.00 .8 DLH @ $6 $4.80 Fixed Overhead * $2,440,000 $1,320,000 These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. The company’s marketing research department has recommended an introductory sales price of $30. Selling expenses are estimated to be $500,000 annually plus $2 for each unit…
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Question 3 The Buffalo Machine Sdn. Bhd. was evaluating its cost structure relating to quality costs. Below items are the cost of quality in the year 2020. With this allocation of quality costs, the company lost 20% of sales due to poor performance. To improve the situation, the company would like to perform the cost of quality analysis. Items Product Reliability Test Process Quality Assurance Audit Rework Cost Production Inspection Supplier Quality System Audit Defect Repair Cost Market Defect Cost Sampling Inspection Quality Assurance Training Product Warranty Cost Cost/RM 10000 8500 12000 12000 5500 18000 80000 8000 16000 40000 a) Identify the items for prevention, appraisal, and failure costs. b) Compute the ratio of prevention, appraisal, and failure costs to total quality costs. c) Based on the analysis of the cost of quality, recommend the company's actions to improve the product quality.
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