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Activity-Based Supplier Costing Ventana Company is a car window repair and replacement company operating in...

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Accounting

Activity-Based Supplier Costing

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

Activity
Adverse buying* 624,000
Supplier returns** 68,400

* 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 $80 $135 $77 $132
Units purchased 15,000 15,000 35,000 35,000
Insufficient units 900 900 3,000 3,000
Returned units 425 425 1,000 1,000

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. If required, round your answers to the nearest cent.

Total unit cost
Jones Glass Claro Glass
Side
WS

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