Activity$-$Based Supplier Costing that the quality of the Johnson engine is worth the price difference.

Frank Wallace, the controller, has decided to use activity costing to resolve the issue. The following activity cost and supplier data have been collected:

Activity

Cost

Replacing engines ${?}^a$

$$1,200,000$

Expediting orders ${?}^b$

$1,500,000$

Repairing engines ${?}^c$

$2,700,000$ before being sold. Engine failure often causes collateral damage, and other parts often need to be replaced.

${?}^b$ Due to late or failed delivery of engines. expensive.

$\backslash$table$[[,$Watson,Johnson$],[$Engines replaced by source,$2,970,30],[$Late or failed shipments,$297,3],[$Warranty repairs $($by source$),3,660,90]]$

Required:

Calculate the activity$-$based supplier cost per engine $($acquisition cost plus supplier$-$related activity costs$).($Round to the nearest cent.$)$

Watson s $x$ per engine

Johnson $ $$ X per engine