Apply the Concepts: ABC Supplier Costing Haley Sims, a purchasing manager uses two suppliers as the source of two electronic components, X1Z and Y2Z. Data associated with these two components are supplied below. Component failure and internal process failure can both lead to reworking costs; late delivery and internal process failure can both lead to expediting costs. I. Activity Costs (component failure and late delivery are attributable to suppliers; process failure is caused by internal processes): Component Failure/Late Delivery Process Failure Activity Reworking products $500,000 125,000 $100,000 25,000 Expediting products II. Supplier Data Unit purchase price Units purchased Fielding Electronics Oro Limited xiz Y2Z xiz Y2Z $11 $25 $13 $27 100,000 50,000 12,500 12,500 12,500 475 75 5000 Failed units 13 Late shipments 1. Calculate the activity rates for assigning costs to suppliers (round to the nearest dollar): Reworking rate: $ Expediting rate: $ per failed component per late delivery 2. Calculate the total unit purchasing cost for each component for each supplier by completing the following table (round unit costs to the nearest cent; all other costs to the nearest dollar): Fielding Electronics XIZ YAZ Oro Limited xiz Y2Z Reworking Products: Rate x Rate x Rate x Rate x Expediting Products: Rate x Rate x Total costs Units Unit cost Unit purchase cost Total unit supplier cost Apply the Concepts: ABC Supplier Costing Haley Sims, a purchasing manager uses two suppliers as the source of two electronic components, X1Z and Y2Z. Data associated with these two components are supplied below. Component failure and internal process failure can both lead to reworking costs; late delivery and internal process failure can both lead to expediting costs. I. Activity Costs (component failure and late delivery are attributable to suppliers; process failure is caused by internal processes): Component Failure/Late Delivery Process Failure Activity Reworking products $500,000 125,000 $100,000 25,000 Expediting products II. Supplier Data Unit purchase price Units purchased Fielding Electronics Oro Limited xiz Y2Z xiz Y2Z $11 $25 $13 $27 100,000 50,000 12,500 12,500 12,500 475 75 5000 Failed units 13 Late shipments 1. Calculate the activity rates for assigning costs to suppliers (round to the nearest dollar): Reworking rate: $ Expediting rate: $ per failed component per late delivery 2. Calculate the total unit purchasing cost for each component for each supplier by completing the following table (round unit costs to the nearest cent; all other costs to the nearest dollar): Fielding Electronics XIZ YAZ Oro Limited xiz Y2Z Reworking Products: Rate x Rate x Rate x Rate x Expediting Products: Rate x Rate x Total costs Units Unit cost Unit purchase cost Total unit supplier cost
