Activity-Based Supplier Costing Clearsound uses Alpha Electronics and La Paz Company to buy two electronic components used in the manufacture of its cell phones: Component 125X and Component 30Y. Consider two activities: testing components and reordering components. After the two components are inserted, testing is done to ensure that the two components in the phones are working properly. Reordering occurs because one or both of the components have failed the test and it is necessary to replenish component inventories. Activity cost information and other data needed for supplier costing are as follows: I. Activity Costs Caused by Suppliers (testing failures and reordering as a result) II. Supplier Data Required: Determine the cost of each supplier by using ABC. Round unit costs to two decimal places.

BuyFind

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773
BuyFind

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773

Solutions

Chapter 5, Problem 26BEA
Textbook Problem

Activity-Based Supplier Costing

Clearsound uses Alpha Electronics and La Paz Company to buy two electronic components used in the manufacture of its cell phones: Component 125X and Component 30Y. Consider two activities: testing components and reordering components. After the two components are inserted, testing is done to ensure that the two components in the phones are working properly. Reordering occurs because one or both of the components have failed the test and it is necessary to replenish component inventories. Activity cost information and other data needed for supplier costing are as follows:

  1. I.                    Activity Costs Caused by Suppliers (testing failures and reordering as a result)

Chapter 5, Problem 26BEA, Activity-Based Supplier Costing Clearsound uses Alpha Electronics and La Paz Company to buy two , example  1

  1. II.                 Supplier Data

Chapter 5, Problem 26BEA, Activity-Based Supplier Costing Clearsound uses Alpha Electronics and La Paz Company to buy two , example  2

Required:

Determine the cost of each supplier by using ABC. Round unit costs to two decimal places.

Expert Solution

Want to see the full answer?

Check out a sample textbook solution.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Chapter 5 Solutions

Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 5 - What is driver analysis? What role does it play in...Ch. 5 - What are value-added activities? Value-added...Ch. 5 - What are nonvalue-added activities? Nonvalue-added...Ch. 5 - Identify and define four different ways to manage...Ch. 5 - What is cycle time? Velocity?Ch. 5 - A batch-level driver is consumed by a product each...Ch. 5 - Which of the following is a nonunit-level driver?...Ch. 5 - Use the following information for Multiple-Choice...Ch. 5 - Use the following information for Multiple-Choice...Ch. 5 - The first stage of ABC entails the assignment of...Ch. 5 - The second stage of ABC entails the assignment of...Ch. 5 - Interview questions are asked to determine a. what...Ch. 5 - The receiving department employs one worker who...Ch. 5 - Assume that the moving activity has an expected...Ch. 5 - Which of the following is a true statement about...Ch. 5 - Which of the following is a true statement about...Ch. 5 - This year, Lambert Company will ship 1,500,000...Ch. 5 - Lambert Company has two suppliers: Deming and...Ch. 5 - A forklift and its driver used for moving...Ch. 5 - Which of the following are nonvalue-added...Ch. 5 - Suppose that a company is spending 60,000 per year...Ch. 5 - The cost of inspecting incoming parts is most...Ch. 5 - Thom Company produces 60 units in 10 hours. The...Ch. 5 - Thom Company produces 60 units in 10 hours. The...Ch. 5 - Striving to produce the same activity output with...Ch. 5 - Use the following information for Brief Exercises...Ch. 5 - Use the following information for Brief Exercises...Ch. 5 - Calculating ABC Unit Costs Perkins National Bank...Ch. 5 - Assigning Costs to Activities McCourt Company...Ch. 5 - Activity-Based Customer Costing Sleepeze Company...Ch. 5 - Activity-Based Supplier Costing Clearsound uses...Ch. 5 - Nonvalue-Added Costs Lemmons Inc. has the...Ch. 5 - Velocity and Cycle Time Kolby Company takes 36,000...Ch. 5 - Use the following information for Brief Exercises...Ch. 5 - Use the following information for Brief Exercises...Ch. 5 - Calculating ABC Unit Costs Community Credit Union...Ch. 5 - Assigning Costs to Activities Craig Company...Ch. 5 - Activity-Based Customer Costing Limpio Company...Ch. 5 - Activity-Based Supplier Costing Blackburn Inc....Ch. 5 - Nonvalue-Added Costs Evans Inc. has the following...Ch. 5 - Velocity and Cycle Time Tara Company takes 8,000...Ch. 5 - Consumption Ratios; Activity Rates Saludable...Ch. 5 - Activity Rates Patten Company uses activity-based...Ch. 5 - Comparing ABC and Plantwide Overhead Cost...Ch. 5 - Activity-Based Product Costing Suppose that a...Ch. 5 - Assigning Costs to Activities, Resource Drivers...Ch. 5 - Activity-Based Customer-Driven Costs Suppose that...Ch. 5 - Activity-Based Supplier Costing Bowman Company...Ch. 5 - Use the following information for Exercises 5-44...Ch. 5 - Use the following information for Exercises 5-44...Ch. 5 - Use the following information for Exercises 5-44...Ch. 5 - Cycle Time and Velocity In the first quarter of...Ch. 5 - Product-Costing Accuracy, Consumption Ratios Plata...Ch. 5 - Product-Costing Accuracy, Consumption Ratios,...Ch. 5 - Formation of an Activity Dictionary A hospital is...Ch. 5 - Activity Rates and Activity-Based Product Costing...Ch. 5 - Value- and Nonvalue-Added Costs Waterfun...Ch. 5 - Functional-Based versus Activity-Based Costing For...Ch. 5 - Plantwide versus Departmental Rates,...Ch. 5 - Production-Based Costing versus Activity-Based...Ch. 5 - Elmo Clinic has identified three activities for...Ch. 5 - Customers as a Cost Object Morrisom National Bank...Ch. 5 - Grundvig Manufacturing produces several types of...Ch. 5 - Activity-Based Supplier Costing Levy Inc....Ch. 5 - Danna Martin, president of Mays Electronics, was...Ch. 5 - John Thomas, vice president of Mallett Company (a...Ch. 5 - Cycle Time, Velocity, Product Costing Goldman...Ch. 5 - Sharp Paper Inc. has three paper mills, one of...Ch. 5 - Consider the following conversation between...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Describe the elements of an e-mail address.

Accounting Information Systems

Briefly explain what is meant by the term efficiency continuum.

Fundamentals of Financial Management (MindTap Course List)

What is inflation and what causes it?

Essentials of Economics (MindTap Course List)

What is meant by catering theory, and how might it impact a firm's dividend policy?

Fundamentals of Financial Management (MindTap Course List)

Suppose a firm estimates its WACC to be 10%. Should the WACC be used to evaluate all of its potential projects,...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)