Prepare the comparative analysis of each product for the year.

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Bison Creek Company is preparing its annual profit plan. As part of its analysis of the cost of its purchasing activity, management estimates that the $250,000 for purchasing support should be assigned to the individual vendors from the information given as follows: Vendor A Vendor B Vendor C Units purchased 100,000 100,000 500,000 Purchase orders (annual) 12 24 50 Number of shipments received 12 52 100 Required: a. Allocate the purchasing costs to the three vendors, assuming Bison Creek uses units purchased to compute activity-based costs. b. Allocate the purchasing costs to the three vendors, assuming Bison Creek uses purchases orders to compute activity-based costs. c. Allocate the purchasing costs to the three vendors, assuming Bison Creek uses number of shipments to compute activity-based costs.

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Chapter 10, Problem 18E

To determine

Prepare the comparative analysis of each product for the year.

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Bison Creek Company is preparing its annual profit plan. As part of its analysis of the cost of its purchasing activity, management estimates that the $250,000 for purchasing support should be assigned to the individual vendors from the information given as follows: Vendor A Vendor B Vendor C Units purchased 100,000 100,000 500,000 Purchase orders (annual) 12 24 50 Number of shipments received 12 52 100 Required: a. Allocate the purchasing costs to the three vendors, assuming Bison Creek uses units purchased to compute activity-based costs. b. Allocate the purchasing costs to the three vendors, assuming Bison Creek uses purchases orders to compute activity-based costs. c. Allocate the purchasing costs to the three vendors, assuming Bison Creek uses number of shipments to compute activity-based costs.

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