Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Agilis companies use the activity-based costing (ABC) method to determine supplier costs. The Purchasing Department Manager uses two main suppliers, Syarikat Maju and Syarikat Prima
Agilis companies use the activity-based costing (ABC) method to determine supplier costs. The Purchasing Department Manager uses two main suppliers, Syarikat Maju and Syarikat Prima to procure the two required components, Component A1 and Component B2. Throughout 2017, a number of product repair costs were incurred as there was damage to components purchased from suppliers and there were errors during the production process. The cost of speeding up product production is also involved due to supplier delays in delivering components and damage done by production workers. The associated costs are as follows: Production Process Cost Activity Cost of damage to purchased components/ supplier delays Product repair RM800,000 Accelerate product production RM200,000 RM40,000 RM10,000 Supplier related data is as follows: The purchase price per unit Purchase units Number of damaged units Number of late deliveries Maju's Company A1 B2 RM20 RM52 80,000 40,000 1,600 380 60 40 Prima's Company A1 B2 RM24 RM56 10,000 10,000 10 10 0 0 Be required: Calculate the cost for each supplier using the activity-based costing (ABC) method
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started