ctivity-Based Supplier Costing Ventana Company is a car window repair and replacement company operating in the after-sales market. Ventana’s 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* 696,000 Supplier returns** 79,800 * 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 $60 $145 $57 $142 Units purchased 15,000 15,000 30,000 30,000 Insufficient units 750 750 3,600 3,600 Returned units 425 425 1,000 1,000 Required: 1. Calculate the activity rates for assigning costs to suppliers. Adverse buying rate $fill in the blank 1 per adverse purchase Supplier return rate $fill in the blank 2 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 $fill in the blank 3 $fill in the blank 4 WS $fill in the blank 5 $fill in the blank 6
ctivity-Based Supplier Costing Ventana Company is a car window repair and replacement company operating in the after-sales market. Ventana’s 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* 696,000 Supplier returns** 79,800 * 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 $60 $145 $57 $142 Units purchased 15,000 15,000 30,000 30,000 Insufficient units 750 750 3,600 3,600 Returned units 425 425 1,000 1,000 Required: 1. Calculate the activity rates for assigning costs to suppliers. Adverse buying rate $fill in the blank 1 per adverse purchase Supplier return rate $fill in the blank 2 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 $fill in the blank 3 $fill in the blank 4 WS $fill in the blank 5 $fill in the blank 6
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Activity-Based Supplier Costing
Ventana Company is a car window repair and replacement company operating in the after-sales market. Ventana’s 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* | 696,000 |
| Supplier returns** | 79,800 |
* 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 | $60 | $145 | $57 | $142 | |||||||||
| Units purchased | 15,000 | 15,000 | 30,000 | 30,000 | |||||||||
| Insufficient units | 750 | 750 | 3,600 | 3,600 | |||||||||
| Returned units | 425 | 425 | 1,000 | 1,000 |
Required:
1. Calculate the activity rates for assigning costs to suppliers.
| Adverse buying rate | $fill in the blank 1 | per adverse purchase |
| Supplier return rate | $fill in the blank 2 | 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 | $fill in the blank 3 | $fill in the blank 4 |
| WS | $fill in the blank 5 | $fill in the blank 6 |
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