Activity-Based Supplier Costing

Ventana Company is a car window repair and replacement company operating in the after-sales market. Ventanas purchasing manager uses two suppliers (Jones Glass and Claro Glass) for the source of its passenger car windows. Data relating to side windows (Side) and windshields (WS) are given below.

I. Activity costs

Activity
Adverse buying*	624,000
Supplier returns**	68,400

* Extra cost of purchasing from local car dealer because of insufficient delivery of supplier. ** Windows returned because they were not ordered or because they were defective.

II. Supplier Data

	Jones Glass		Claro Glass
	Side	WS		Side	WS
Unit purchase price		$80			$135				$77			$132
Units purchased		15,000			15,000				35,000			35,000
Insufficient units		900			900				3,000			3,000
Returned units		425			425				1,000			1,000

Required:

1. Calculate the activity rates for assigning costs to suppliers.

Adverse buying rate		per adverse purchase
Supplier return rate		per return

2. Calculate the total unit purchasing cost for each component for each supplier. If required, round your answers to the nearest cent.

	Total unit cost
	Jones Glass	Claro Glass
Side
WS