Activity Based Supplier Costing 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 tate; 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 $695,000 Inspecting components (sampling only) Reworking products (due to falled component) Warranty work (due to falled component 8,620,000 12,270,000 11. Supplier Data Manzer Inc Buckner Company Unit purchase price Units purchased $89 $86 800,000 3,200,000 Sampling hours 80 3,920 Rework hours 360 5,640 Check My Work 4more Check My Work uses remaining Printem Rework hours 350 5.600 15,200 Warranty hours 800 * Sang impaction for ander product has been reduced because there Required: 1. Calculate the cost per component for each supplier taking into consideration the costs of the supplier related activities and using the current prices and sales volume. (Note: Round the intermediate calculations to the whole number for the following activity rates: "Reworking products and Warranty work". Round the unit cost to two decimal places) Manzer Inc per una Buckner Company per unit 2a. Suppose that Bowman totes $5.984,000 in sales per year because it develops a poor reputation due to defective units attributable to failed components. Using watranty hours, assign the cost of lost sales to each suche Manzer Buckner 2b. By how much would this change the cost of each supplier's component? Round your answers to the nearest cent. Manzer Buckner 3. Based on the analysis in Requirements 1 and 2 discuss the importance of activity based supplier costing for internal decision making Check My Work 4more Check My Work uses remaining Previous Next >