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Tulsa Company is a car brake repair and replacement company operating in the after-sales market. Tulsa's purchasing manager uses two suppliers (Stridulo and Fallimento) for
Tulsa Company is a car brake repair and replacement company operating in the after-sales market. Tulsa's purchasing manager uses two suppliers (Stridulo and Fallimento) for the source of its passenger car brakes. Data relating to brake discs (Discs) and brake pads (Pads) are given below. I. Activity Costs Activity Adverse buying Supplier returns*** $800,000 100,000 *Extra cost of purchasing from local car dealer because of insufficient delivery of supplier. **Brakes returned because they were not ordered or because they were defective. II. Supplier Data Stridulo Brakes Fallimento Brakes Discs Pads Discs Pads $146.50 Unit purchase price Units purchased Insufficient units $53.75 10,000 $148.75 10,000 2,000 $46.50 15,000 6,000 1,500 2,000 15,000 6,000 1,500 Returned units 500 500 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. Total unit cost Stridulo Brakes Fallimento Brakes Discs Pads
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