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

Adverse buying $600,000

Supplier returns 90,000

II. Supplier Data

	Jones	Glass	Claro	Glass
	Side	WS	Side	WS
Unit Purchase price	$60	$135	$57	$132
Units Purchased	15000	15000	30000	30000
Insufficient units	750	750	3000	3000
Returned units	375	375	1500	1500

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

2) Calculate the total unit purchasing cost for each component for each supplier.

3) What if the quantity of side windows that can be purchased is limited to 15,000 units from Jones and 45,000 units from Claro? There is no limit from either source for windshields. Based on cost, what purchasing mix should be chosen? What problem does this create? What else might you suggest if you were the manager of Ventana?